Pennsylvania inheritance tax rates run from 0% to 15%, and the rate each heir pays depends on their relationship to the person who died. A surviving spouse pays nothing. Children, grandchildren, and parents pay 4.5%. Siblings pay 12%. Everyone else pays 15%. The tax applies to each beneficiary’s share rather than to the estate as a whole, so two people inheriting from the same person can owe very different amounts.
Who Pays Each Rate
Pennsylvania sorts beneficiaries into tiers and applies a flat percentage to the value each one receives.1Pennsylvania General Assembly. Pennsylvania Code 72 PS 9116 – Tax Rate
- 0% for a surviving spouse.
- 0% for transfers between a parent (or stepparent) and a child age 21 or younger, in either direction.
- 0% for qualifying charities and government entities.2Commonwealth of Pennsylvania. Inheritance Tax
- 4.5% for lineal descendants and ancestors: children (including stepchildren), grandchildren, parents, and grandparents. The widow or widower of a deceased child also pays 4.5%.
- 12% for siblings, including half-siblings. Step-siblings do not qualify and pay 15% instead.
- 15% for everyone else: nieces, nephews, cousins, friends, unmarried partners, and anyone outside the categories above.
When property passes to a married couple with right of survivorship and the two spouses would otherwise fall into different tiers, the lower rate applies to the whole interest.1Pennsylvania General Assembly. Pennsylvania Code 72 PS 9116 – Tax Rate
Pennsylvania abolished common-law marriage as of January 1, 2005, but a surviving partner from a common-law marriage that was validly established before that date can still claim the 0% spousal rate.
What Property Is Taxed
The tax reaches almost everything of value: Pennsylvania real estate, tangible items like vehicles, furniture, artwork, and jewelry, and intangible holdings such as bank accounts, brokerage accounts, and certificates of deposit. Real estate located in Pennsylvania is taxed even when the owner lived in another state.2Commonwealth of Pennsylvania. Inheritance Tax
Every asset is reported at its fair market value on the date of death. Bank balances and publicly traded securities are easy. Real estate, closely held businesses, and collectibles usually need a professional appraisal, because the Department of Revenue reviews reported values and can adjust them upward.
Property the deceased co-owned with right of survivorship is taxable to the extent of the deceased’s share. Property owned jointly between spouses is fully exempt. For other co-owners, documentation of each party’s contribution matters, because that’s what limits the taxable fraction.2Commonwealth of Pennsylvania. Inheritance Tax
Exempt Assets
Several categories escape the tax entirely.
Life insurance proceeds on the deceased’s life are exempt, whether they go to a named beneficiary or to the estate.3Pennsylvania General Assembly. Pennsylvania Code 72 PS 9111 – Transfers Not Subject to Tax
Traditional IRAs and 401(k) plans are exempt if the deceased was under age 59½, on the reasoning that the federal early-withdrawal penalty meant the owner did not have unrestricted access. Roth IRA contributions are taxable even for younger decedents, because the owner could have withdrawn contributions without penalty at any time; only the earnings portion of a Roth is exempt. One catch: if the deceased was disabled at the time of death, both IRAs and 401(k) plans become taxable regardless of age.4Pennsylvania Department of Revenue. Is a Decedent’s IRA or 401K Subject to PA Inheritance Tax
Agricultural land transferred to family members can be exempt if it stays in agricultural use for seven years after the death and produces at least $2,000 in annual gross farming income during that period. The property must be reported on a timely filed return.5Pennsylvania Department of Revenue. Inheritance Tax Q&A
A separate $3,500 family exemption may be claimed from estate assets by a surviving spouse. If there is no spouse, children who lived in the deceased’s household can claim it; if there are no qualifying children, a parent living in the household qualifies. The exemption cannot be taken from property specifically left to someone else in the will if other assets are available.6Pennsylvania General Assembly. Pennsylvania Code 20 PaCS 3121 – Family Exemption It reduces the taxable base before the rates are applied.7Pennsylvania Department of Revenue. What Is the Family Exemption for Inheritance Tax
Gifts Made Shortly Before Death
You cannot avoid the tax by giving property away in the last year of life. Any gift made within one year of death is taxable, with one carve-out: each recipient has a $3,000 annual exclusion per calendar year, and only the amount above $3,000 to any one person is taxed.8Pennsylvania General Assembly. Pennsylvania Code 72 PS 9107 – Transfers Subject to Tax
The tax also reaches lifetime transfers where the deceased kept the right to use the property, receive income from it, or revoke the transfer. Property subject to those retained interests is treated as part of the taxable estate, and giving up such a power within one year of death counts as a taxable transfer.8Pennsylvania General Assembly. Pennsylvania Code 72 PS 9107 – Transfers Subject to Tax
Filing, Deadlines, and the Early-Payment Discount
The estate representative files Form REV-1500 with the Register of Wills in the county where the deceased lived, in duplicate.9Pennsylvania Department of Revenue. REV-1500 Inheritance Tax Return The return lists all assets at date-of-death value, along with allowable deductions such as funeral expenses, legal fees for estate administration, and outstanding debts or mortgages. Supporting documentation includes bank statements, brokerage reports, and appraisals. The Department of Revenue then issues a notice setting out its own valuation and the tax due.10Pennsylvania Department of Revenue. Inheritance Tax General Information
The return is due no later than nine months after the date of death. Pay sooner if you can: full payment within three months of death earns a 5% discount on the tax.2Commonwealth of Pennsylvania. Inheritance Tax On a $200,000 bill, that is $10,000 saved.
Missing the nine-month deadline has two consequences. Interest starts accruing on unpaid tax beginning nine months and one day after the death. A penalty may also apply, equal to 25% of the tax ultimately due or $1,000, whichever is less.10Pennsylvania Department of Revenue. Inheritance Tax General Information When the estate’s assets are mostly illiquid, the Department of Revenue allows payment plans arranged through a district office. Interest continues to accrue on the unpaid balance, but a plan avoids the harsher consequences of nonpayment.11Pennsylvania Department of Revenue. Is It Possible to Set Up a Payment Plan for Inheritance Tax Purposes
Selling Real Estate Before the Tax Is Paid
The inheritance tax creates a statutory lien on estate property. Title companies will not issue title insurance while an inheritance tax obligation is unresolved, and without title insurance most residential sales cannot close. In practice, the executor either files the REV-1500 and pays before selling, or arranges with the title company to pay the tax from the sale proceeds at closing. Addressing this early prevents delays that can derail a buyer.
Pennsylvania Inheritance Tax vs. Federal Estate Tax
Pennsylvania inheritance tax is separate from the federal estate tax. The federal tax applies only to estates above $15,000,000 in 2026, after the temporarily higher exemption under the Tax Cuts and Jobs Act expired at the end of 2025.12Internal Revenue Service. Estate Tax Most Pennsylvania estates fall well below that threshold and owe no federal estate tax. Pennsylvania’s tax has no minimum: every dollar of taxable property is subject to the applicable rate.
For estates that owe both, the IRS allows a deduction under section 2053(d) for state death taxes paid on property passing to qualifying charities. The full Pennsylvania tax is not deductible; the deduction is limited to the portion attributable to charitable transfers.13eCFR. 26 CFR 20.2053-9 – Deduction for Certain State Death Taxes Values reported to Pennsylvania and to the IRS need to be consistent.