Key Takeaways
- Pennsylvania inheritance tax rates range from 0% to 15%, depending on who inherits.
- The tax is due at death and becomes delinquent nine months after death.
- Paying the inheritance tax within three months can qualify for a 5% discount.
- A surviving spouse generally pays 0% Pennsylvania inheritance tax.
Introduction
Pennsylvania has an inheritance tax, but it does not have a Pennsylvania estate tax. The tax rate generally depends on your relationship to the person who died rather than the size of the estate.
For families settling an estate, understanding PA inheritance tax can make the process easier to manage. The Pennsylvania inheritance tax rules determine which assets are taxable, which transfers are exempt, what deductions may reduce the taxable amount, and when the return and payment are due.
This guide explains inheritance tax in PA in plain English, including current rates, exemptions, filing requirements, retirement accounts, worked examples, and considerations for inheritance planning.
PA Inheritance Tax Rates by Relationship
The Pennsylvania inheritance tax rate depends on the relationship between the person who died and the person receiving the property.
| Who inherits | Pennsylvania inheritance tax rate |
|---|---|
| Surviving spouse | 0% |
| Parent, from a child aged 21 or younger | 0% |
| Child aged 21 or younger, from a parent | 0% |
| Children, grandchildren and other lineal descendants, including stepchildren, their spouses, and parents and grandparents, unless a 0% rate above applies | 4.5% |
| Siblings (at least one parent in common, by blood or adoption) | 12% |
| Everyone else, including nieces, nephews, aunts, uncles and friends | 15% |
| Charities, exempt institutions and government entities | Exempt |
The Pennsylvania Department of Revenue states that transfers to a surviving spouse and certain transfers involving a parent or child aged 21 or younger are taxed at 0%. Transfers to direct descendants and lineal heirs are generally taxed at 4.5%, transfers to siblings at 12%, and transfers to other heirs at 15%.
For Pennsylvania inheritance tax purposes, siblings are people who have at least one parent in common with the person who died, whether related by blood or adoption. Children include natural, adopted and stepchildren.
The executor will often handle payment from estate assets for the beneficiaries
How Much Is Inheritance Tax in PA? Worked Examples
The following examples are hypothetical and show the tax before deductions.
| Heir | Inheritance | Rate | Tax | 5% discount if paid within 3 months | Tax after discount |
|---|---|---|---|---|---|
| Spouse | $500,000 | 0% | $0 | $0 | $0 |
| Child (older than 21) | $400,000 | 4.5% | $18,000 | $900 | $17,100 |
| Sibling | $200,000 | 12% | $24,000 | $1,200 | $22,800 |
| Niece | $100,000 | 15% | $15,000 | $750 | $14,250 |
These examples illustrate why the relationship between the heir and the decedent (the person who died) is one of the most important factors when estimating inheritance tax in PA.
A surviving spouse inheriting $500,000 would have a $0 Pennsylvania inheritance tax liability under the applicable 0% rate. A child older than 21 inheriting $400,000 would have a hypothetical tax of $18,000 before the early-payment discount.
Hypothetical Example With Deductions
Consider this hypothetical example based on figures from the Allegheny County Register of Wills:
Assume a parent and a child older than 21 held a joint account for more than one year before the parent’s death. The account’s value at death is $20,500. One-half, or $10,250, is included. After deducting a $4,200 funeral bill, the amount is reduced to $6,050.
At a 4.5% rate, the tax is $272.25. If the tax is paid within three months, the 5% discount is $13.61, leaving a hypothetical tax due of $258.64.
Actual estate calculations can involve additional assets, deductions and exemptions, so families should review their situation with their estate attorney and CPA.
What’s Taxable Under PA Inheritance Tax?
Pennsylvania inheritance tax generally applies to property transferred at death, including real and personal property subject to the state’s rules. Pennsylvania real estate and tangible personal property can also be taxable when a person who died was not a Pennsylvania resident.
Joint and Convenience Accounts
Jointly owned property between spouses is exempt.
For property held jointly by people other than spouses, the taxable amount generally reflects the decedent’s share of the joint property. Adding someone’s name to an account for convenience does not necessarily make the property exempt from inheritance tax.
There is also a one-year rule for certain joint property created shortly before death. Under the Revenue guidance, if the decedent established joint ownership within one year of death, the property may have its full value subject to tax, less a $3,000 exclusion.
For a convenience account shared by two people who are not spouses, the survivor is generally taxed on one-half of the amount in the account. The original account owner may also owe tax if the non-spouse added for convenience dies first.
The exact facts and account structure matter. Ask your estate attorney or CPA to confirm how the one-year rule and any exclusion apply.
Gifts Made Within One Year of Death
Certain transfers made within one year before death may be included for Pennsylvania inheritance tax purposes. Gifts made during that period may be taxable to the extent that the transfer exceeds $3,000 per recipient during a calendar year.
Families considering significant gifts can discuss both the timing and the potential Pennsylvania inheritance tax consequences with their estate attorney and CPA.
Retirement Accounts
Tax treatment depends on the account type, the owner’s age and disability status, and the plan’s terms, according to the Pennsylvania Department of Revenue.
Traditional IRAs are generally not taxable when the decedent was under age 59½, unless the decedent was disabled at death. Roth IRAs are treated differently: for an owner who died under age 59½, contributions are generally included, while earnings are excluded under Revenue’s guidance.
For a 401(k), taxability generally depends on the owner’s right to access the plan without penalty during life, often linked to the plan’s normal retirement age, usually 62 or 65. Retirement accounts can be taxable regardless of age when the decedent was disabled.
For related information, see inherited IRA and 401(k) rules.
What’s Exempt: PA Inheritance Tax Exemptions
Several types of property and transfers can qualify for an exemption.
Life Insurance
Life insurance proceeds are not taxable for Pennsylvania inheritance tax purposes when the policy is life insurance rather than an annuity.
Spousal Joint Property
Property owned jointly between spouses is exempt under the Pennsylvania inheritance tax rules.
Charitable Transfers
Transfers to qualifying charitable organizations, exempt institutions and government entities are exempt.
Family Exemption
A $3,500 family exemption may apply to the estate of a Pennsylvania resident. A surviving spouse may claim it first. If no spouse qualifies, a child in the decedent’s household may claim it. If no spouse or child qualifies, a parent in that household may claim it.
Agriculture and Family-Owned Businesses
The business-of-agriculture exemption may apply to qualifying real estate kept in agricultural use for seven years after death. Requirements include at least $2,000 in gross agricultural income each year and continued ownership by eligible family members.
For business owners, an interest in a qualified family-owned business can also qualify when it meets the applicable requirements. These include fewer than 50 full-time equivalent employees, a net book value of assets below $5 million, and being in existence for at least five years, with ownership by eligible family members continuing for at least seven years after death.
Military Exemption
An exemption applies to qualifying deaths occurring on or after September 6, 2022. It concerns personal property from the estate of a serving military member whose death resulted from an injury or illness sustained during active duty with the armed forces, a reserve component or the National Guard.
Deductions That Lower the Taxable Amount
Certain expenses can reduce the amount subject to Pennsylvania inheritance tax. Potential deductions include:
- Debts
- Administration costs
- Funeral and burial expenses
- Attorney and fiduciary fees
- Burial lot and marker expenses
These deductions may affect the final tax calculation. The estate’s records should support the expenses claimed.
When Is PA Inheritance Tax Due, and How Does the 5% Discount Work?
Pennsylvania inheritance tax is due at death. It becomes delinquent nine months after the individual’s death.
A 5% discount is available when inheritance tax is paid within three months after death. The discount is the lesser of 5% of the tax paid or 5% of the tax due.
The distinction between paying and filing matters. The discount is earned by paying the tax within the applicable period, not simply by filing the return.
Interest accrues on tax that remains unpaid after nine months.
An estate can request a filing extension using REV-1846. The extension cannot exceed six months. An extension of the filing period does not stop interest from accruing after nine months.
How to File a Pennsylvania Inheritance Tax Return
The Pennsylvania inheritance tax return is generally filed by the executor or administrator. If there is no executor or administrator, the person receiving the property may be responsible for filing. The return is generally due within nine months after death, unless a filing extension is granted.
The primary form for a resident estate is REV-1500. It is filed in two copies with the Register of Wills in the county where the decedent was a resident at death.
For resident-estate payments, checks are payable to:
“Register of Wills, Agent”
For a nonresident decedent, the applicable form is REV-1737-A, which is generally filed directly with the Pennsylvania Department of Revenue.
Filing in Philadelphia
Philadelphia estates have specific filing procedures, outlined by the City of Philadelphia.
Two completed copies are filed at City Hall, Room 177. The listed hours are Monday through Friday, 8 a.m. to 4:30 p.m. The telephone number is (215) 686-2918.
Most returns have no filing fee. Additional fees may apply in some cases, including:
- Miscellaneous filing: $70
- Affidavit of death: $65
- Supplemental filing: $25
- Release of lien: $25
Review generally takes three to six months from filing with the Register of Wills.
Families handling a Philadelphia estate can work with their estate attorney and CPA to prepare the return and supporting documentation under the applicable filing requirements.
Does Pennsylvania Have an Estate Tax?
Pennsylvania does not currently impose a state estate tax. Its inheritance tax rate depends primarily on the relationship between the decedent and beneficiary.
Federal estate tax rules are separate and may apply to estates that meet federal requirements.
Inherited money itself is not taxable for Pennsylvania personal income tax purposes. Our guide to taxes on inherited money covers related tax considerations.
New Jersey inheritance tax has different rates, exemptions and filing requirements.
Ways Families Plan Around Pennsylvania Inheritance Tax
Families may consider several planning approaches when preparing for the transfer of wealth. The appropriate choice depends on the family’s circumstances, estate structure and broader financial plan.
Life Insurance
Life insurance proceeds can provide liquidity for heirs and are generally exempt from Pennsylvania inheritance tax. Annuities do not qualify for this life-insurance exemption.
For broader estate-planning context, see our irrevocable life insurance trust guide.
Timing of Lifetime Gifts
The one-year rule means that the timing of certain gifts can matter when planning an estate. Gifts made within one year of death may be taxable to the extent they exceed $3,000 per recipient during a calendar year.
Paying Within Three Months
When inheritance tax is due, paying within three months after death can provide the applicable 5% discount.
Farm and Family-Business Exemptions
Families with qualifying agricultural property or family-owned businesses may be able to use the applicable exemptions when all requirements are met.
Coordinating Beneficiary Designations
Beneficiary designations can be reviewed alongside the overall estate plan to consider your family’s intentions and how assets may transfer under the applicable rules.
These are planning considerations rather than recommendations. Talk with your estate attorney and CPA about your situation.
Proposed Changes to Watch
As of October 2026, several Pennsylvania inheritance tax proposals remain pending and are not current law. SB 100, which would create a $100,000 family exemption, has been in Appropriations since March 23, 2026. SB 750 and SB 751 have been in Finance since June 9, 2025. The current rates above remain the applicable rates.
How Liberty One Helps
Inheritance tax planning often involves more than calculating a tax bill. Families may also need to consider liquidity, investment management, beneficiary designations and the timing of asset transfers.
Liberty One Wealth Advisors can help coordinate inheritance tax timing and liquidity as part of a broader financial plan. We can work alongside your estate attorney and CPA so that financial decisions remain connected to the rest of your plan.
At Liberty One Wealth Advisors, our approach to inheritance planning is objective, educational and focused on helping families make informed decisions about long-term financial security.
FAQ
Do you have to pay taxes on inheritance money in PA?
Generally, yes, unless an exemption applies. Pennsylvania inheritance tax rates depend on the relationship between the person who died and the beneficiary. A surviving spouse pays 0%. Other beneficiaries may pay 4.5%, 12% or 15%, depending on the relationship. Inheritances themselves are not subject to Pennsylvania personal income tax.
Do out-of-state beneficiaries pay PA inheritance tax?
It depends on where the decedent lived at death and where the property is located, rather than where the beneficiary lives. For a nonresident decedent, Pennsylvania real estate and tangible personal property can be subject to Pennsylvania inheritance tax. Families should discuss their specific circumstances with their estate attorney and CPA.
How much can you inherit from your parents without paying tax in PA?
Children generally pay a 4.5% Pennsylvania inheritance tax rate, with no general dollar threshold that makes an inheritance tax-free. A child aged 21 or younger can qualify for a 0% rate under the applicable rule. SB 100 would create a $100,000 family exemption, but it is not law.
Is life insurance subject to PA inheritance tax?
Life insurance proceeds on the life of the decedent are generally not subject to Pennsylvania inheritance tax. Annuities do not qualify for this exemption. Families should review the type of policy with their estate attorney or CPA when determining the applicable treatment.
Is an inherited IRA or 401(k) taxed?
A traditional IRA is generally exempt from PA inheritance tax if the owner died before 59½ and was not disabled. For a Roth IRA owner who died before 59½, contributions are generally taxable, while earnings are excluded. A 401(k)’s tax treatment depends on the plan’s withdrawal rights and retirement-age rules. If the owner was disabled at death, retirement accounts can be taxable regardless of age.
Who files the inheritance tax return, and where?
The executor or administrator generally files the REV-1500 in duplicate (two copies) with the Register of Wills in the county where the decedent lived at death. If the decedent was a nonresident, REV-1737-A is generally filed directly with the Pennsylvania Department of Revenue. If neither an executor nor administrator is appointed, the recipient of taxable property may need to file.
What happens if the tax is paid late?
Pennsylvania inheritance tax becomes delinquent nine months after the individual’s death. Interest accrues on unpaid tax after that point. An extension of the filing period does not stop interest from accruing after nine months. Paying within three months after death can qualify for the applicable 5% discount.
