What is inheritance tax in PA? If you’re wondering what to expect after a loved one passes away, you’re not alone. Many people misinterpret inheritance tax laws or feel uneasy about the process.
Working with an attorney can help put your mind at ease. A trusted professional can guide you through the intricacies of what inheritance tax is and help you understand your role and responsibilities when an estate is being administered after a loved one’s passing.. Keep reading to learn what the inheritance tax is in Pennsylvania.
What Is the Inheritance Tax in PA?
The Pennsylvania Department of Revenue defines inheritance tax as an imposed percentage of the value of the decedent’s estate transferred to beneficiaries by will, heirs, and operation of law. Taxation rates can vary based on the relation of the heir to the decedent.
What is the inheritance tax rate in Pennsylvania? Here’s a helpful guide:
- 0 percent on transfers to a surviving spouse or parent of a child 21 years or younger
- 4.5 percent on transfers to direct descendants and lineal heirs
- 12 percent on transfers to siblings
- 15 percent on transfers to other heirs, except charitable organizations, exempt institutions, and government entities exempt from tax
In addition to wondering what the inheritance tax rate is in PA, you may also be thinking about the amount you need to pay and when it’s due to the state.
Payments are due following the decedent’s passing and become errant nine months after the person’s death. A 5 percent discount may be applied if the inheritance tax is paid within three months of the decedent’s passing. An attorney can help you calculate the exact numbers (or lack thereof) for your unique situation.
Inheritance Tax for Inherited Assets
Property and assets located in Pennsylvania are subject to inheritance tax, including cars, jewelry, stocks, and other high-value items. Assets exempt from inheritance tax can include property jointly owned by spouses, including farmland and other agricultural areas.
Personal property transferred from the estate of a serving military member who has passed from an injury or illness while on active duty in the armed forces, a reserve component, or the National Guard, is exempt from inheritance tax in Pennsylvania.
IRA accounts — if the person who died had not reached the age of 59 and a half — and life insurance proceeds paid to a beneficiary can be additional exemptions. The eligibility for exemptions varies based on several factors. Get in touch with an attorney to learn more about inheritance tax laws and regulations.
Timely Filing With the Help of Auld Brothers Law
At Auld Brothers Law, we’re a team of experienced estate attorneys who can educate and guide you throughout the inheritance tax process. From determining assets and obtaining deductions, reviewing documents for accuracy, and completing a return, we’re here for you every step of the way.
Did you know a personal representative has nine months from the deceased person’s date of death to file and pay the inheritance tax return? There may be a tax penalty for a missed deadline. You can rest assured that our team helps you meet important deadlines so you can avoid additional payments.
We aim to make this challenging time easier as you navigate your legal responsibilities. Are you still wondering, “What is the inheritance tax process in PA?” The attorneys at Auld Brothers Law are here to provide you with detailed information to answer your questions. Contact us today or send a message.