Pennsylvania Inheritance Tax: Rates and Who Pays

Pennsylvania is one of only a few states that still taxes inheritances, and the amount owed turns almost entirely on who receives the property rather than how large the estate is. This is one of the topics covered in Pennsylvania estate planning: wills, trusts, and probate. Here the focus is the question most people search first: what the inheritance tax rates are, who pays them, what property is taxed, and when the return and payment are due. It also sorts out a common mix-up between the inheritance tax and the estate tax.

How Pennsylvania inheritance tax works

The Pennsylvania inheritance tax is charged on the transfer of a deceased person’s property to a beneficiary. It is not a tax on the estate as a whole, and it is not paid by the beneficiary out of separate income. The tax is calculated on the value of what each person receives, and the rate is set by that person’s relationship to the person who died.

The tax applies when a Pennsylvania resident dies, no matter where the property sits, and when a nonresident dies owning real estate or tangible personal property located in Pennsylvania, under 72 P.S. § 9116. The Pennsylvania Department of Revenue administers the tax, while the Register of Wills in the county where the decedent lived receives the return and the payment.

Value is measured at the date of death, after subtracting allowable deductions such as debts of the decedent, funeral costs, and estate administration expenses. The detailed valuation rules sit in the state regulations at 61 Pa. Code Chapter 93.

Inheritance tax rates by relationship

Pennsylvania uses four rates, each tied to a class of heir. As of 2026, 72 P.S. § 9116 sets them as follows:

• 0 percent on property passing to a surviving spouse, and on property passing between a parent and a child age 21 or younger.
• 4.5 percent on property passing to direct descendants and lineal heirs, including children, grandchildren, and parents.
• 12 percent on property passing to siblings.
• 15 percent on property passing to any other person, such as nieces, nephews, cousins, friends, and unmarried partners.

The 0 percent spousal rate has applied to estates of decedents dying on or after January 1, 1995. The 0 percent rate for a transfer from a parent to a child age 21 or younger applies to parents who died after December 31, 2019.

What property is taxed and what is exempt

Pennsylvania inheritance tax reaches most of what a person owns or controls at death: Pennsylvania real estate, bank and investment accounts, business interests, vehicles, and personal property. Jointly held property is generally taxed on the deceased owner’s fractional share, and some assets a person gave away within one year of death can be pulled back into the taxable transfer under the valuation rules at 61 Pa. Code Chapter 93.

Several categories are exempt. Property that passes to a surviving spouse is taxed at 0 percent, as noted above. Proceeds of life insurance paid on the life of the decedent are exempt, and transfers to charitable organizations and government bodies are not taxed. The Pennsylvania Department of Revenue publishes the full exemption list, and Pennsylvania separately exempts qualifying transfers of family farms and certain family-owned business interests that meet the statutory conditions.

Pennsylvania has no separate estate tax

People often use “estate tax” and “inheritance tax” as if they mean the same thing, but they are different taxes. An estate tax is charged to the estate itself based on its total value before anything is distributed. An inheritance tax is charged on each beneficiary’s share based on the relationship. Pennsylvania levies only the inheritance tax. The older “pick-up” estate tax that once existed in Pennsylvania was tied to a federal credit that no longer exists, so no Pennsylvania estate tax is collected today. The Pennsylvania Department of Revenue treats the inheritance tax as the state’s transfer tax at death.

A federal estate tax still exists, but it is a separate federal law and applies only to estates that exceed a high federal exemption amount. Most Pennsylvania estates owe no federal estate tax and deal only with the state inheritance tax.

Filing and paying the inheritance tax

For a Pennsylvania resident, the inheritance tax return is Form REV-1500, filed with the Register of Wills in the county where the decedent lived. Under 72 P.S. § 9136, the return must be filed within nine months after the date of death. The Department of Revenue may grant one extension of up to six months to file, but an extension to file does not extend the time to pay.

Payment timing carries its own rule. Under 72 P.S. § 9142, inheritance tax is due at the date of death and becomes delinquent nine months after death. Tax paid within three months of the death qualifies for a 5 percent discount on the amount paid. Interest accrues on tax that stays unpaid after the nine-month mark.

1. Open the estate with the Register of Wills

   The personal representative, meaning the executor or administrator, opens the estate in the county where the decedent lived. That office, part of the county’s Orphans’ Court operations, is where the inheritance tax return and payment are handled for residents.

2. Inventory the property and value it at date of death

   List Pennsylvania real estate, accounts, investments, business interests, and personal property, valued as of the date of death. Subtract debts, funeral expenses, and administration costs allowed under 61 Pa. Code Chapter 93.

3. Complete Form REV-1500

   Report each transfer and apply the rate for that heir’s relationship class. The return groups property by beneficiary because different heirs are taxed at different rates.

4. File and pay within nine months

   File the return and pay the tax through the Register of Wills within nine months of death under 72 P.S. § 9136. Paying within three months of death captures the 5 percent discount.