![]() ![]() What property is subject to tax? First, all property passing under the will or by intestacy is taxable. For example, if a child receives a bank account because it was in joint names with the decedent and the account was not reported by the executor, it is that child’s responsibility to make sure the account is reported properly and the tax is paid. Otherwise, the recipient of the property is responsible for filing a return and paying the tax. The executor of the decedent’s will is responsible for reporting assets and paying the tax on all assets in the estate or any other assets subject to inheritance tax that are known to him. If the tax is paid within three months of the date of death, there is a five percent discount on the tax available for early payment. The tax must be paid within nine (9) months of the decedent’s death. Property passing to a qualifying charity is exempt from the application of the inheritance tax. The inheritance tax does not apply to the proceeds of life insurance (in any amount) on the life of the decedent. This means that the first dollar passing to a child is taxable. This means that no matter what the size of the estate, if there is taxable transfer, inheritance tax is due. There is no exemption for property passing to family members. For property passing to all others, the rate is fifteen percent.Property passing to charity is exempt from the tax. ![]() For property passing to siblings, even if they have only one parent in common, or they are adopted, the rate is twelve percent.Children includes stepchildren and adopted children. Lineal descendants include children and more remote descendants. For property passing to lineal ascendants (mother, father, grandmother, grandfather) or lineal descendants (child, grandchild, wife or widow of a child, husband or widower of a child) the rate is four and a half percent.This was a very controversial tax and was finally repealed so that no tax is due on property inherited by a widow or widower Go figure.) Prior to 1995, transfers passing to spouses were taxable at the six percent rate. (I know this sounds odd, but the law is written in such a way so that property passing to surviving spouses is taxable but at a zero rate. For property passing to spouses, zero percent.The Pennsylvania Inheritance Tax is an excise tax on the receipt of inherited property by a beneficiary. Six states have an inheritance tax: Pennsylvania, New Jersey, Kentucky, Maryland (Maryland has both an inheritance tax and an estate tax), Iowa, and Nebraska. Twelve states and the District of Columbia have an estate tax: Maine, Massachusetts, Vermont, New York, Rhode Island, Connecticut, Illinois, Minnesota, Maryland, Washington, Oregon, and Hawaii. Contact Chuck at or (724) 776-8000 for more information on remote notarization services in Pennsylvania or other estate planning matters.Pennsylvania is one of the seventeen states in the United States that has a death tax. Pittsburgh Estate Planning AttorneysĬhuck Hadad helps families and individuals achieve the private, secure and safe passage of their assets in a manner that is easily understood and cost-effective. If the tax is paid within three months of death, a 5% discount is permitted. Inheritance tax in Pennsylvania is due nine months after a person dies. Inheritance tax is imposed on each share of the estate going to certain beneficiaries, whether in accordance with the terms of a Will or Trust or by state law if no such documents exist. There are only six states which collect inheritance taxes, Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. This change is similar to the change enacted by the Pennsylvania legislature in January 1995, in which the 6.0% inheritance tax that applied on assets transferred to a living spouse was eliminated and married beneficiaries were provided a new tax rate of 0% on assets left by their spouse. Notably not included are grandparents and step-grandparents. This new 0% tax rate is established in Section 21 of Act 13 of 2019 (House Bill 262) and applies to property transferred by a natural parent, an adoptive parent, or a stepparent who dies after December 31, 2019. Children under 21 years of age are still taxed, but at a rate of 0%. If the child was over 21 years of age at the time of the death of the parent, the child, or the estate depending on the terms of distribution, will remain responsible for payment of the 4.5% inheritance tax. The class is narrowly defined as a child of a parent who was 21 years or younger at the death of the parent. Pennsylvania has relieved the tax burden from a class of beneficiaries who inherit from their parents. PA Inheritance Tax Has Changed For Children, Age 21 or Younger, Who Inherit Money From a Parent ![]()
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