The Pennsylvania Inheritance Tax is imposed as a percentage of the value of almost any transfer from the estate of a decedent who was a resident of Pennsylvania. It does not matter whether the transfer occurs due to a gift (specific or residuary) under a Will to a beneficiary, by virtue of intestacy to an heir, or by operation of law to a transferee. The tax rate varies depending on the relationship of the beneficiary, heir or transferee to the decedent.
The rates for Pennsylvania inheritance tax are as follows:
- 0 percent on transfers to a surviving spouse or to a parent from a child aged 21 or younger;
- 4.5 percent on transfers to direct descendants and lineal heirs;
- 12 percent on transfers to siblings; and
- 15 percent on transfers to other heirs, except charitable organizations, exempt institutions and government entities exempt from tax.
Property owned jointly between husband and wife is exempt from inheritance tax.
Effective for estates of decedents dying after June 30, 2012, the Pennsylvania inheritance tax for farming families, previously levied when property was transferred from one generation to the next or between family members, is eliminated.
Inheritance tax payments are due upon the death of the decedent and become delinquent nine months after the individual’s death. If inheritance tax is paid within three months of the decedent’s death, a 5 percent discount is allowed.
Preparation of the Pennsylvania Inheritance Tax Return can be tricky. At Drake, Hileman & Davis, we have been helping individuals successfully complete this complicated and difficult task for many years. Call us if you have questions about Pennsylvania Inheritance Tax or if you need an estimate of what the inheritance taxes in the estate will be.
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