What is Pennsylvania Inheritance Tax and how is it calculated?

Pennsylvania Inheritance Tax is a tax which is due on an inheritance or other funds received as a result of the death of an individual. Assets subject to tax include, but are not limited to, cash, real estate, jointly held property, transfer on death accounts, beneficiary designated accounts, and gifts made within one year of death. Even though an individual may not have a probate estate, there may still be inheritance tax due as a result of their death.

The amount of inheritance tax due depends on the beneficiary's relationship to the Decedent. Transfers to: (i) spouses and charities are taxed at 0%; (ii) children are taxed at 4.5%; (iii) siblings are taxed at 12%; and (iv) all other parties are taxed at 15%. The beneficiary of an asset is responsible for paying their portion of the tax that is due to the Estate, unless the Decedent's Will provides otherwise.