Form Rev-584 Po - Pennsylvania Inheritance Tax & Safe Deposit Boxes (Page 2 of 2) in pdf

What is the inheritance tax rate in Pennsylvania?

is taxable based on the decedent’s interest in the

who are members of the decedent’s household. The

joint property. This interest is calculated by dividing

family exemption is allowed against assets passed on

The rates for Pennsylvania inheritance tax are as

with or without a will.

the value of the joint property by the number of joint

follows:

owners at the time of the decedent’s death. Joint

Is an inheritance considered taxable for PA

•

0 percent on transfers to a surviving spouse or to

property is taxable even in situations where the

personal income tax purposes?

a parent from a child aged 21 or younger;

decedent’s name was added as a matter of

No, inheritances are not taxable for PA personal

•

4.5 percent on transfers to direct descendants

convenience. Further, if the decedent created the

income tax purposes. However, if you qualify for Tax

and lineal heirs;

joint interest in the property within a year of his/her

Forgiveness, you will need to include as income on PA

•

12 percent on transfers to siblings; and

death, the full value of the property is taxable in the

Schedule SPA the value of any inheritance received

decedent’s estate, less $3,000.

•

15 percent on transfers to other heirs, except

the prior year.

charitable organizations, exempt institutions and

Can funeral expenses and the decedent’s unpaid

If an individual dies before he reaches the age of

government entities exempt from tax.

bills be deducted from the amount subject to tax?

59 1/2, is the decedent's IRA or 401K subject to

Property owned jointly between husband and wife is

Yes, unsatisfied liabilities incurred by the decedent

PA inheritance tax?

exempt from inheritance tax.

prior to his/her death are deductible against his/her

IRAs are not subject to inheritance tax, unless the

taxable estate. In addition to debts incurred by the

Who are direct descendants and lineal heirs for the

decedent was considered disabled. For 401Ks, the

decedent or the estate, costs of administration of the

purposes of inheritance tax?

same provision applies unless the owner of a plan

estate and funeral and burial expenses are

Direct descendants include all natural children of

could have closed out the plan during his lifetime. For

deductible, including attorney fees, fiduciary fees and

parents and their descendants (whether or not they

most plans, the right to close out is not realized until

the cost of the burial lot, tombstone or grave marker.

have been adopted by others), adopted descendants

the retirement age is reached, usually 62 or 65 years

For the sake of convenience, I put my mother’s

and their descendants and step-descendants.

of age.

name on my savings account. Recently my

Lineal heirs include grandfathers, grandmothers,

Who files the inheritance tax return?

mother died, and now I am told I have to pay

fathers, mothers and their children. Children include

Inheritance tax returns must be filed within nine

inheritance tax on my own money. Is this true?

natural children (whether or not they have been

months of a decedent’s death by the person named

Under inheritance tax law, the account was jointly

adopted by others), adopted children and stepchildren.

in the will as executor or the individual approved as

owned, since you and your mother had equal access

Is there a discount on inheritance tax?

administrator by the Register of Wills, in cases where

to the account. Therefore, in this case, the survivor

no will exists at death. If no executor or

Inheritance tax becomes due at death and must be

is taxed on one-half the amount in the account.

administrator is named and property or transfers

reported and remitted before nine months passes

Was the “widows’ tax” repealed in Pennsylvania?

exist, then the person(s) receiving the property must

from the date of death. If payment is made within

file and pay the tax.

The 6 percent tax on transfers to surviving spouses,

three months of the date of death, a 5 percent

commonly known as the widows’ tax, was eliminated

discount of the tax paid or the tax due, whichever is

Where is the inheritance tax return to be filed?

in 1995. Now Pennsylvania widows and widowers pay

less, applies.

If the decedent was a Pennsylvania resident at

no tax on assets inherited from deceased spouses.

What property is subject to inheritance tax?

death, the inheritance tax return must be filed in

What is the family exemption and how much can

duplicate with the register of wills in the decedent’s

All real and tangible personal property of a PA

be claimed?

county of residence.

resident decedent, including but not limited to cash,

oil and gas rights, automobiles, furniture, antiques

The family exemption is awarded to certain

If the decedent was not a resident of Pennsylvania but

and jewelry located in Pennsylvania at the time of the

individuals so they may retain or claim certain types

had assets located in Pennsylvania, the inheritance

decedent’s death, is taxable. All intangible property

of a decedent’s property in accordance with Section

tax return must either be filed in duplicate with the

of a resident decedent, including stocks, bonds, bank

3121 of the Probate, Estate and Fiduciaries Code. For

accounts loans receivable, etc., is also taxable,

decedents who died after Jan. 29, 1995, the family

located, to obtain letters testamentary or letters of

regardless of where it is located at the decedent’s

exemption is $3,500.

administration, or the return must be filed directly

death.

with the PA Department of Revenue, when letters

Who is entitled to claim the family exemption?

testamentary or letters of administration are provided

In the case of a nonresident decedent, all real and

The family exemption may be claimed by the spouse

by a jurisdiction outside Pennsylvania.

tangible personal property located in Pennsylvania at

of a decedent who was a resident of Pennsylvania. If

the decedent’s death is taxable. Intangible personal

Do safe deposit boxes have to be inventoried

there is no spouse or if the spouse forfeited his

property of a nonresident decedent is not taxable.

after someone dies?

rights, any child of the decedent who is a member of

Jointly-owned property with right of survivorship,

the decedent’s household may claim the exemption.

Yes. Because safe deposit boxes may contain assets

except between husband and wife, including but not

In the event there is no spouse or child, the

subject to Pennsylvania inheritance tax, the law

limited to real estate, securities and bank accounts,

exemption may be claimed by a parent or parents

requires an inventory prior to the removal of contents

Form Rev-584 Po - Pennsylvania Inheritance Tax & Safe Deposit Boxes Page 2

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