What Is the Inheritance Tax Rate in Pennsylvania?

Pennsylvania’s inheritance tax rate is 0%, 4.5%, 12%, or 15%, set entirely by the heir’s relationship to the person who died. A surviving spouse pays nothing. Children, grandchildren, and parents pay 4.5%. Siblings pay 12%. Everyone else — nieces, nephews, friends, unmarried partners — pays 15%. Unlike the federal estate tax, which only reaches estates worth more than $15 million in 2026, Pennsylvania’s inheritance tax has no minimum threshold and applies to estates of any size.¹ A $50,000 estate left to a sibling owes $6,000 just as surely as a larger one does.

The Four Rates and Who Pays Each

Pennsylvania sets its inheritance tax rates under 72 P.S. § 9116, and the rate is tied to the beneficiary, not the estate. A single estate can generate several rates at once: 0% on a spouse’s share, 4.5% on a child’s, and 15% on a friend’s, all on the same return.

0% — Spouses and Young Children

A husband or wife inherits everything tax-free. The 0% rate also applies to a parent inheriting from a child who was 21 or younger, and in reverse when a child 21 or younger inherits from a parent.²

4.5% — Lineal Descendants and Ascendants

This covers children of any age (unless the 0% rule above applies), grandchildren, great-grandchildren, parents inheriting from an adult child, grandparents, and the spouse of a deceased child.² A son-in-law or daughter-in-law whose spouse (the decedent’s child) has died still qualifies for the 4.5% rate.

12% — Siblings

Brothers and sisters of the deceased pay 12%, including half-siblings and siblings by adoption.²

15% — Everyone Else

Nieces, nephews, cousins, friends, unmarried partners, and any other person or entity not listed above pay the highest rate.² Long-term partners who were not legally married fall into this group, which catches many people by surprise.

When Beneficiaries at Different Rates Share Property

Pennsylvania applies a quiet but valuable rule for jointly inherited property. When property passes to a married couple with right of survivorship and each spouse would normally be taxed at a different rate, the lower rate applies to the entire interest.² If a parent leaves property jointly to a daughter (4.5%) and her husband (15%), the whole transfer is taxed at 4.5%.

Property That Falls Outside the Rates Entirely

The relationship-based rates only matter for property Pennsylvania actually taxes. Several categories of assets are exempt under 72 P.S. § 9111, regardless of who inherits them. The effective rate on these is zero even when the beneficiary would otherwise owe 15%.

Life insurance. All life insurance proceeds on the deceased’s life are exempt, whether paid to a named beneficiary or to the estate. Social Security lump-sum death payments and VA death benefits are also exempt.³

Jointly owned spousal property. Anything a husband and wife owned together with right of survivorship — joint bank accounts, real estate titled as tenants by the entireties — passes to the surviving spouse completely free of tax.³ This exemption only runs between spouses.

Charitable and government transfers. Bequests to qualifying charities, exempt institutions, and government entities are not taxed.⁴

Family farms. Agricultural real estate transferred to family members is exempt if the land stays in farming for seven years after the death and produces at least $2,000 in gross farm income each year. New owners must certify annually to the Department of Revenue, and the tax plus interest comes due back to the date of death if the land is pulled out of farming within that window.³

Small family businesses. A business with fewer than 50 full-time equivalent employees, a net book value under $5 million, and at least five years of operation at the time of death qualifies for exemption if it stays in family hands for seven years. The business cannot be primarily an investment or asset-management entity, and each new owner must file an annual certification by February 15.⁵

Nonresident intangible property. When a nonresident of Pennsylvania dies owning stocks, bonds, or bank accounts, those assets are exempt even if a Pennsylvania firm manages them.³ A nonresident’s Pennsylvania real estate and tangible personal property remain taxable.

Assets the Rate Still Reaches Even Without Probate

A frequent misconception is that only probate assets face the tax. Under 72 P.S. § 9107, several non-probate transfers are pulled back into the taxable estate and taxed at the heir’s relationship rate.

Joint accounts with non-spouses. If joint ownership was set up more than a year before death, the deceased person’s fractional share is taxable. The share is calculated by dividing the total by the number of joint owners, regardless of who deposited the money. On a two-person joint account, half the balance is taxed at the surviving owner’s rate.

Retirement accounts. IRAs and 401(k) accounts are generally taxable. Traditional IRAs are typically taxable when the account holder was over 59½ at death. For Roth IRAs, the full value is taxable regardless of the decedent’s age. These accounts pass by beneficiary designation outside the will, which leads many families to assume wrongly that they escape the tax.

Trusts with retained interests. If the deceased created a trust but kept the right to income, control over who benefits, or the power to revoke or change it, those trust assets are taxed.⁶ Giving up the power to revoke a trust within one year of death still counts as a taxable transfer.

The 5% Discount and the Deadline That Changes What You Actually Pay

The posted rate is not always the rate paid. Pennsylvania offers a 5% discount on any inheritance tax paid within three months of the date of death.⁴ On a $100,000 tax bill, prepaying inside that window saves $5,000. Because final valuations are rarely complete that quickly, many estates make a good-faith estimated payment early to capture the discount, then true up when the return is filed.

The tax is technically due on the date of death, but the state allows nine months before treating the balance as delinquent. After that, the Department of Revenue charges simple interest at the annual rate set by the U.S. Secretary of the Treasury, which is 7% for 2026.⁷ Failing to file the return at all can add a penalty of 25% of the tax owed or $1,000, whichever is less.⁸

What the Rate Is Applied To

The rate attaches to the net value each beneficiary receives, not the gross estate. Funeral and burial costs, including the plot, casket, headstone, and funeral home services, are fully deductible.⁹ Mortgages, credit card balances, personal loans, and unpaid medical bills owed at death reduce the taxable total.¹⁰ Reasonable administration expenses, including attorney fees and executor commissions, come off as well. A surviving spouse can also claim a family exemption of up to $3,500 in estate property, which passes to children of the household (and then to parents of the household) if no spouse qualifies.¹¹ Every deduction claimed reduces the base to which the 4.5%, 12%, or 15% rate is then applied, so documenting them carefully is where the real savings live.

1
IRS. What’s New – Estate and Gift Tax
2
Pennsylvania General Assembly. Pennsylvania Code 72 PS 9116 – Rates of Tax
3
Pennsylvania General Assembly. Pennsylvania Code 72 PS 9111 – Transfers Not Subject to Tax
4
Pennsylvania Department of Revenue. Inheritance Tax
5
Pennsylvania Department of Revenue. What Are the Requirements to Qualify for the Family-Owned Business Exemption From Inheritance Tax
6
New York Codes, Rules and Regulations. 72 PS 9107 – Transfers Subject to Tax
7
Pennsylvania Department of Revenue. What Is the Current Interest Rate
8
Pennsylvania Department of Revenue. REV-720 Inheritance Tax General Information
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Pennsylvania General Assembly. Pennsylvania Code 72 PS 9127 – Expenses
10
Pennsylvania Department of Revenue. REV-1500 Inheritance Tax Return
11
Pennsylvania General Assembly. Pennsylvania Code Title 20 Section 3121 – Family Exemption