Pennsylvania Inheritance Tax

The Pennsylvania Inheritance Tax is a tax on all transfers of property at death, under a will or otherwise. The tax is imposed on the fair market value of assets passing at death in accordance with a three-tiered rate structure. Bequests to spouses and certain trusts for spouses are taxed at 0%, bequests to lineal ancestors and descendants (e.g. children and grandchildren) are taxed at 4.5%, bequests to siblings are taxes at 12%, and bequests to all other persons are taxed at 15%. Charitable bequests will not be taxed.

On the Pennsylvania Inheritance Tax Return, deductions may be claimed for the funeral expenses, the expenses of administering the estate, and the decedent's debts. The Pennsylvania Inheritance Tax return is due and the tax payable nine months after the decedent's death.

Transfers made within one year of the decedent's death are subject to tax to the extent that the aggregate value of gifts to that transferee exceeds $3,000.00 during any calendar year.

The ultimate legal liability for payment of the tax is imposed on the recipient of the property, although most persons provide in their will that the tax will be paid for out of the estate.