Pennsylvania has an inheritance tax which is a tax on the inheritance of property, whether real or personal. It is not a tax on the property itself but is based on the value of the property.
Transfers that are subject to inheritance tax include:
Transfers that are not subject to inheritance tax include:
The current inheritance tax rate for an individual who dies from July 1, 2000 to the present are as follows:
For an individual who dies prior to July 1, 2000, differing tax rates apply. Please consult Settlements, Ltd. if you have a question concerning any of the above.
Inheritance tax is based on the value of the transferred property as of the date of the transferor or decedent’s death (with allowable deductions such as expenses of the administration of the estate, funeral and burial expenses, property taxes, mortgages, liens of record, closings costs, other debts such as medical). Inheritance tax, if unpaid, is a lien upon real property. The lien relates back to the date of death. Nothing needs to be filed by the PA Department of Revenue to impose such a lien although the Department of Revenue may file a certificate of non-payment of inheritance tax within the 20 year lien period (the time the lien continues to exist). The filing of such a certificate extends the lien for a period of five years. The Department of Revenue can refile every five years in order to further extend the lien.