How Does the Pennsylvania Inheritance Tax Work?

How Does the Pennsylvania Inheritance Tax Work?

Common questions about the Pennsylvania inheritance tax are related to tax rates, availability of discounts and lineal heirs. Other frequently asked questions are about the types of property subject to the tax and where the taxes may be filed.

As of 2015, the Pennsylvania inheritance tax rate is 4.5 percent for lineal heirs, 12 percent for siblings and 15 percent for other heirs. There are no taxes on inheritances to tax-exempt organizations or spouses who were widowed after January 1, 1995. Parents inheriting property from their children are exempt from taxes if the child was age 21 or younger.

For the purposes of determining Pennsylvania inheritance taxes, lineal heirs are considered any direct ancestor or descendant of the deceased. This includes step-parents, step-children, children who have been adopted and biological children who have been adopted by others.

Pennsylvania inheritance tax is due at the time of death. A discount of 5 percent of the lesser of the tax paid or the tax due is applied to payments received within three months of the day of death. Taxes are considered

delinquent after nine months. Inheritance taxes are remitted to the Register of Wills in the decedent's county of residence. If the decedent was not a resident of Pennsylvania, taxes are paid to the county that issued the Letters Testamentary or Letters of Administration.