Pennsylvania Inheritance Tax Rules
When a loved one dies, it can be a traumatic experience. Of course, personal feelings aside, in many cases, legalities involve themselves in the loss. Among those are inheritance and the taxes that accompany them. These taxes and laws vary from state to state, including those in Pennsylvania, as dictated by the Pennsylvania Inheritance Tax.
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Definition
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The Pennsylvania Inheritance Tax is imposed as a percentage on the value of the deceased person's estate transferred to beneficiaries through a will, heirs by intestacy, and transferees by operation of law. According to state law, this tax rate varies depending on the relationship of the heir to the deceased.
Tax Rates
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According to Pennsylvania law, inheritance tax rates are the following:
*4.5 percent on transfers made to direct descendants and lineal heirs
*12 percent on transfers to siblings
*15 percent on transfers made to other heirs, save for charitable organizations, exempt organizations and government entities that are tax exempt -
Inheritance Tax Exemptions
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In some cases, those receiving an inheritance won't have to pay no tax whatsoever under Pennsylvania law. If the inheritance is transferred to a surviving spouse or to a parent from a child age 21 or younger, there is no tax owed on inheritance. Also, there is no inheritance owed on property owned jointly between husband and wife. Life insurance and retirement plans are also tax-exempt under state law, though those inheriting these funds must often adhere to certain technical standards/file proper paperwork to ensure such tax exemption.
Payment Due Dates
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According to Pennsylvania law, inheritance tax payments are due upon the death of the deceased, and are considered late nine months to the day from the individual's death. If the inheritance tax is paid within three months from the date of death, a 5 percent discount is also included.
More Information
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More information on Pennsylvania law pertaining to the Pennsylvania Inheritance Tax can be found at revenue.state.pa.us.
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