Pennsylvania Inheritance Tax Calculator

One of only five states that still charges inheritance tax

Most of the United States taxes the estate, if it taxes anything at all. Pennsylvania does the opposite: it taxes each share, and the rate depends on the person receiving it, not on the size of the estate. There is no threshold below which nothing is due. A 20,000 dollar share to a nephew is taxed at the same 15 percent as a two million dollar one.

Who inherits	Rate
Surviving spouse	0 %
Parent of a child who died aged 21 or younger	0 %
Children, grandchildren, parents, other lineal heirs	4.5 %
Brothers and sisters	12 %
Everyone else	15 %
Charities, exempt institutions, government bodies	0 %

Note where the line falls. A niece or nephew is not a lineal heir and pays 15 percent, the same as a friend. An unmarried partner pays 15 percent too, however long the relationship lasted. This is the single biggest reason to be deliberate about who is named in a Pennsylvania will.

What counts as the taxable share

The tax is charged on the net value: the assets the heir receives, minus their share of the debts, the funeral bill and the cost of administering the estate. Real estate in Pennsylvania is always included, wherever the heir lives. Out-of-state real estate is not.

Several things fall outside the tax entirely and should not be entered above:

• Life insurance paid to a named beneficiary, regardless of the amount.
• Property owned jointly by spouses, which passes free of tax.
• Assets that were already given away more than one year before the death. Gifts made within that year are pulled back in, apart from the first 3,000 dollars per recipient per year.

Farmland kept in agricultural use and qualified family-owned business interests can be exempt as well, but both carry conditions that have to be met for years after the death.

The five percent discount is worth claiming

The tax becomes due at the moment of death and is late nine months later. Pay within three months, though, and Pennsylvania takes 5 percent off the bill. On a 4.5 percent share of 400,000 dollars, that is 18,000 dollars of tax and 900 dollars of discount for filing early.

Estates rarely have final numbers within three months, so the usual approach is to pay a deliberately generous estimate at the Register of Wills in the county where the deceased lived, then settle the difference when the return is filed. Overpayments are refunded.

The will decides who lands in which class

Nothing in a will changes the rates, but the will decides who receives what, and that is where the money moves. Leaving 100,000 dollars to a sibling costs 12,000 dollars in tax; leaving the same amount to a child costs 4,500. Leaving it to a charity costs nothing.

Where there is no will, Pennsylvania intestacy rules pick the heirs, and they often produce a spread of shares across several tax classes that nobody intended. Writing the will is the part you control.