En esta noticia
Dealing with an inheritance in the United States often means navigating a complex mix of rules at the same time families are coping with a loss. From wills and probate to estate taxes and state inheritance taxes, the process of passing assets from a deceased person to their heirs and beneficiaries varies widely from state to state.
Pennsylvania is one of the few states that still charge an inheritance tax, and it offers a way to pay less: according to the Pennsylvania Department of Revenue, estates that pay within three months of the death receive a 5% discount.
Who pays the inheritance tax in Pennsylvania, and how much
Pennsylvania’s inheritance tax rates depend on the heir’s relationship to the deceased:
- 0% for a surviving spouse or for a parent inheriting from a child aged 21 or younger.
- 4,5% for children, grandchildren, and other direct descendants.
- 12% for siblings.
- 15% for other heirs, except charities and other exempt institutions.
Some assets are exempt, including property owned jointly by spouses and certain farmland transferred to eligible relatives. Experts recommend consulting an attorney or the local Register of Wills before making payments.
How does the 5% discount work, and when does it apply?
The discount is a reduction on the inheritance tax itself. In practice, if the estate pays the tax early, it pays 5% less on that payment.
For example, if the inheritance tax owed is $20,000 and the estate pays it in full within the deadline, it only has to pay $19,000. The $1,000 difference is the discount.
The payment must meet these requirements set by the Pennsylvania Department of Revenue:
- Must be made within three calendar months of the date of death. After that, the full tax applies.
- Discount only covers the amount actually paid in that period. If the estate pays only part of the tax within three months, the 5% applies only to that part.
- Cannot include money that is later refunded. If the estate pays more than it owes and gets a refund, that extra amount does not count toward the discount.
- Payment must go to the County Register of Wills in the county where the deceased person lived.
Attorneys in the state note that many executors make an estimated payment within the first three months to secure the discount and then adjust the final amount.
How to pay the inheritance tax in Pennsylvania
The inheritance tax needs to be paid at the moment of death and becomes delinquent nine months later. After that date, unpaid tax begins to accrue interest.
The executor, or the administrator if there is no will, is responsible for filing the inheritance tax return, Form REV-1500, and paying the tax with estate assets within the nine-month deadline. Estates that cannot pay the full amount can contact the Department of Revenue to ask about payment plans.