Pennsylvania Inheritance Tax …ESTATE ADMINISTRATION
Pennsylvania imposes a tax on assets passing to a beneficiary. The rate of the tax depends on the relationship of the beneficiary to the decedent (the person who has died). This type of tax differs from an estate tax such as that imposed by the Internal Revenue Service on certain larger estates. An estate tax is imposed on the entire estate regardless of the relationship of the persons who benefit from the estate. Only large estates are taxed by the Internal Revenue Service (currently estates having a value at the date of death exceeding $13.61 million for 2024, which means that married couples do not have to pay estate tax if their estate is worth $27.22 million or less. For 2023 the threshold was $12.92 million for individuals and $25.84 million for married couples).
Pennsylvania Inheritance Tax – Look to the future.
Pennsylvania Inheritance tax rates are based upon the following classes of beneficiaries:
Class: tax rate in %
Surviving spouse 0%
Property owned jointly by husband and wife or passing to a surviving spouse is exempt from Pennsylvania Inheritance tax
Minor children:
Beneficiaries of the estate of a child age 21 or less to natural parent, stepparent, adoptive parent
0% tax exempt charitable organizations, tax exempt institutions government entities 0%
Class A (lineal descendants)
Grandparents, parents,
Decedents:
grandfather, grandmother, father, mother, and their children. Children include natural children, (whether or not they have been adopted by others) adopted children; and stepchildren.
exemption of $3500.00 then 4.5%
Class A1 (sibling tax rate)
Brothers, half brothers Half sisters Persons having at least one parent in common with decedent by whole blood or adoption
12% with no exemption
Class B (collateral tax rate)
All other beneficiaries
15% with no exemption
Family farms and certain agricultural property are exempt from Pennsylvania Inheritance Tax if they meet certain conditions.
Life insurance payments are exempt from Pennsylvania Inheritance Tax whether they are payable to the estate or to a beneficiary.
Expenses may be deducted from the value of the estate, including: funeral expenses, attorney fees and executor and personal representative commissions and trustee fees, debts of the decedent including mortgages and unpaid taxes.
Pennsylvania Inheritance Tax forms and due dates
The Pennsylvania Inheritance Tax Return is due 9 months from the date of death and the tax paid within the same time. If the tax is paid within 3 months of the date of death a discount of 5% is allowed. Late payments are subject to penalties and interest. Extensions of the filing dates can be obtained but interest continues to accrue.
Contact Attorney C. Stephen Gurdin Jr. at his office in Wilkes-Barre, PA, 570.826.0481 to begin planning.