What Are the Pennsylvania Inheritance Tax Rates?

What are the Tax Rates for the Pennsylvania Inheritance Tax?

When assets are transferred to family or friends after a person dies, whether through a Will, intestacy laws, or from a retirement account, the Commonwealth of Pennsylvania levies a tax on that transfer based upon the relationship of the beneficiary to the decedent. The inheritance tax rates are as follows:

ZERO PERCENT (0%): transfers to spouses, parents of children who pass away before turning 21, or charities.

FOUR AND A HALF PERCENT (4.5%): transfers to lineal descendants such as grandparents, parents, children (including adopted and step-descendants).

TWELVE PERCENT (12%): transfers to non-lineal descendants such as siblings (including adopted siblings and step-siblings).

FIFTEEN PERCENT (15%): transfers to unrelated individuals.

Proceeds of Life Insurance policies are exempt from Pennsylvania Inheritance tax. Inheritance taxes must be paid within 9 months of a decedent’s passing to avoid paying interest, and if paid within 90 days there is a 5% discount on the amount of tax owed. Engaging an attorney quickly can result in substantial savings on inheritance taxes. As your attorney, we will help you plan how you can distribute your assets to minimize inheritance taxes and ensure that your Estate is responsible for paying Pennsylvania Inheritance taxes rather than your loved ones. In administering estates, we will help inventory your loved one’s assets to pre-pay estimated inheritance taxes and submit inheritance tax returns to guarantee timely payment and filing.

The information within this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own particular situation.