Pennsylvania taxes what heirs receive, and the rate depends entirely on who the heir is. A spouse pays nothing, a child pays 4.5%, a sibling 12% and a friend or other heir 15%.
This guide sets out the rates, the main exemptions, the due date and the early-payment discount, with a worked example of two heirs. It follows the Pennsylvania Department of Revenue's inheritance tax page.
Pennsylvania inheritance tax is imposed as a percentage of the value of a decedent's estate transferred to beneficiaries by will, to heirs by intestacy and to transferees by operation of law. The Department of Revenue says the rate varies depending on the relationship of the heir to the decedent.
| Who inherits | Rate | Tax on a $100,000 inheritance |
|---|---|---|
| Surviving spouse (or a parent inheriting from a child aged 21 or younger) | 0% | $0 |
| Children and other direct descendants and lineal heirs | 4.5% | $4,500 |
| Siblings | 12% | $12,000 |
| Other heirs (nieces, nephews, friends and others), except exempt charities and government entities | 15% | $15,000 |
The Department's REV-1500 instructions add two details: for dates of death on or after January 1, 2020, transfers to or for the use of a child aged 21 or younger from a natural parent, adoptive parent or stepparent are also taxed at 0%, and transfers between stepsiblings are taxed at the 15% rate rather than the 12% sibling rate. Grandparents are taxed at the 4.5% lineal rate.
Property owned jointly between spouses is exempt from inheritance tax. The Department also lists exemptions for certain farm land and other agricultural property transferred to eligible recipients (for decedents dying after June 30, 2012) and for personal property transferred from the estate of a serving military member who died as a result of an injury or illness received on active duty (for decedents dying on or after September 6, 2022).
The Pennsylvania return (Form REV-1500) must be filed for every decedent who has property that is or may be subject to tax. It lists the decedent's assets: real estate, stocks and bonds, closely held corporations, partnerships and sole proprietorships, mortgages and notes receivable, cash, bank deposits and miscellaneous personal property, jointly owned property, and lifetime transfers and other non-probate property. From the total gross assets the return subtracts funeral expenses and administrative costs and the decedent's debts, mortgage liabilities and liens to reach the net value of the estate. Charitable and governmental bequests are then removed to reach the net value subject to tax, and the rates in the table above are applied to each heir's share.
Inheritance tax payments are due upon the death of the decedent and become delinquent nine months after the individual's death. If the tax is paid within three months of the decedent's death, a 5 percent discount is allowed. An extension to file the return does not extend the time to pay, and interest runs from nine months and one day after death.
The return itself must be filed within nine months after the death. Failure to file may subject the estate to a penalty of 25 percent of the tax ultimately found to be due or $1,000, whichever is less. If you cannot file in time, the extension request must be made before the return is due. Check the Department's current instructions for interest on late payments rather than assuming a rate.
For decedents dying after June 30, 2012, certain farm land and other agricultural property is exempt from Pennsylvania inheritance tax if it is transferred to eligible recipients. For the business of agriculture exemption, the Department's Q&A says the real estate must be devoted to agriculture at death, transferred to members of the same family, continue to be devoted to the business of agriculture for seven years after the date of death, produce annual gross income of at least $2,000 in the business of agriculture for those seven years, and be reported on a timely filed inheritance tax return (within 9 months of death, or 15 months if the six-month statutory extension was granted). Each new owner must file an annual certification during the seven years. A business whose sole purpose is the management and leasing of real estate does not qualify. Read the Department's informational notice and Schedule AU before relying on the exemption.
A person dies leaving an estate of $400,000 that is not exempt: $200,000 to a child and $200,000 to a friend.
| Heir | Share | Rate | Tax |
|---|---|---|---|
| Child | $200,000 | 4.5% | $9,000.00 |
| Friend (other heir) | $200,000 | 15% | $30,000.00 |
| Total tax | $400,000 | $39,000.00 |
If the estate pays the $39,000.00 within three months of death, the 5% discount would be $1,950.00, leaving $37,050.00. The example ignores deductions and exemptions, which reduce the value that is taxed; check the Department's forms for those.
The inheritance tax is paid on what each heir receives and is separate from the federal estate tax, which applies only to large estates (see our federal estate tax exemption guide). Income that inherited assets later produce is a separate matter: our inheriting money tax guide explains the federal side. For Pennsylvania's income tax see our Pennsylvania income tax guide.
Pennsylvania Department of Revenue: Inheritance tax, PA Department of Revenue: Form REV-1500 Inheritance Tax Return (resident decedent), PA Department of Revenue: Inheritance tax questions and answers.
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