Pennsylvania Inheritance Tax
Probate & Estate Administration
Pennsylvania Inheritance Tax
The Pennsylvania Inheritance Tax is often misinterpreted, which causes many people to feel anxious about what’s expected of them after a loved one has passed. We are here to help you understand your responsibilities and the best way to handle your Pennsylvania Inheritance Tax responsibilities. At Auld Brothers, our attorneys are knowledgeable about the state’s Inheritance Tax. We’ll provide you with all the information you need to determine what tax is owed and if it is able to be lowered to a lesser amount. You’re in the right place with Auld Brothers Law Group.
Understanding the PA Inheritance Tax
After a person’s death, the Inheritance Tax is evaluated by the state on the majority of assets and property owned by that individual before their death (there are exceptions for certain assets and property). Asset or property transfers to a surviving spouse are not taxed, as well as to any charities. However, children or grandchildren are taxed at 4.5%. The other tax rates will vary depending on the recipient’s relationship to the individual.
It’s important to note that Pennsylvania is one of six states who assesses an Inheritance Tax.
Assets Included in Determining Inheritance Tax
All assets and property located in Pennsylvania are subject to the Inheritance Tax, including:
- 401k’s
- Annuities
- Antiques
- Bank accounts
- Bonds
- Cars
- Cash
- Furniture
- IRA accounts
- Jewelry
- Stocks
Assets Exempt from Inheritance Tax
As mentioned above, there are certain exceptions to taxes on some assets and property. Exceptions include:
- IRA accounts if the individual who died hasn’t reached the age of 59 ½
- Life insurance proceeds paid to a beneficiary
Filing a PA Inheritance Tax Return
If you’re filing a PA Inheritance Tax return, you’ll need to complete a REV-1500 form provided by the PA Department of Revenue (an instructional guide on completing the REV-1500 is available). As the personal representative, you’ll have nine months from the deceased person’s date of death to file and pay the Inheritance Tax return. If you miss the deadline, there is a 25% tax penalty or $1,000 (whichever amount is less).
5% Discount Option
If you prepay the Inheritance Tax within three months of the person’s death, you receive a 5% tax discount on the tax due.
Guarantee Timely Filing with the Help of an Attorney
As estate attorneys, we can educate and guide you throughout the Inheritance Tax process from determining the assets and obtaining deductions, reviewing all documents for accuracy and completing the return. Our goal is to make this challenging time a little easier as you fulfill your legal responsibilities.
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We are happy to provide a free, 30-minute consultation, with legal advice and answer any questions you may have about your current situation. Our goal is to provide you with clear, straightforward information to help you understand what you need.
Rebecca's expertise and insight were evident after discussion on the phone before I even met with her. Once meeting these skills were apparent These traits were on display in her follow up questions and in answers to my questions. Her explanations and analogies show understanding coupled with legal knowledge and explanation of policy. Her abilities were apparent during and after completion of the Estate Planning Process. Her prices are reasonable for high quality work, time spent with the client, and personalize attention.
I am so pleased with the total Estate Planning Package, that I have begun a needed Real Estate Agreement with Rebecca.
I think that Rebecca is very knowledgeable, about law and policy, helpful, creative, and empathetic, and a pleasure to work with. I would recommend her highly without any reservation.
( I met Rebecca for the first time after Thanksgiving of 2021. I needed some accommodations. Both Rebecca and Brian were welcoming and eager to modify the situation to met my requests and needs. I thank them deeply for the concern and accommodations, attention and quality legal documents, completed and in process.)
Gratefully,
Meryl Gotlieb
Thank you, Mrs. Auld, for so efficiently and accurately providing such a reassuring plan for both myself and my heirs.
Rebecca Auld will go to bat for you and is a pleasure to work with!
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