- 1 -
|
FREQUENTLY ASKED QUESTIONS
PENNSYLVANIA INHERITANCE TAX & SAFE DEPOSIT BOXES
REV-584 (PO) 10-22
Inheritance tax is imposed as a percentage of the value of
a decedent’s estate transferred to beneficiaries by will or
intestacy. The tax rate varies depending on the relationship of
the heir to the decedent.
What is the inheritance tax rate in matter of convenience. Further, if the decedent created
the joint interest in the property within a year of his
Pennsylvania? death, the full value of the property is taxable in the
decedent’s estate, less $3,000.
The rates for Pennsylvania inheritance tax are as follows:
• 0 percent on transfers to a surviving spouse, to a
parent from a child aged 21 or younger, and to or for Can funeral expenses and the
the use of a child aged 21 or younger from a parent; decedent’s unpaid bills be deducted
• 4.5 percent on transfers to direct descendants and from the amount subject to tax?
lineal heirs;
• 12 percent on transfers to siblings; and Yes, unsatisfied liabilities incurred by the decedent prior
• 15 percent on transfers to other heirs, except to death are deductible against the taxable estate. In
charitable organizations, exempt institutions and addition to debts incurred by the decedent or the estate,
government entities exempt from tax. costs of administration of the estate and funeral and
Property owned jointly between husband and wife is burial expenses are deductible, including attorney fees,
exempt from inheritance tax. fiduciary fees and the cost of the burial lot, tombstone
or grave marker.
Who are direct descendants and lineal
For the sake of convenience, I put
heirs for the purposes of inheritance tax?
my mother’s name on my savings
account. Recently my mother died,
Direct descendants include all natural children of parents
and their descendants (whether or not they have been and now I am told I have to pay
adopted by others), adopted descendants and their inheritance tax on my own money. Is
descendants and step-descendants. this true?
Lineal heirs include grandfathers, grandmothers, fathers,
mothers and their children. Children include natural Under inheritance tax law, the account was jointly
children (whether or not they have been adopted by owned, since you and your mother had equal access to
others), adopted children and stepchildren. the account. Therefore, in this case, the survivor is taxed
on one-half of the amount in the account.
Is there a discount on inheritance tax?
What is the family exemption and how
Inheritance tax becomes due at death and must be much can be claimed?
reported and remitted before nine months pass from the
date of death. If payment is made within three months
of the date of death, a 5 percent discount of the tax paid The family exemption is awarded to certain individuals
or the tax due, whichever is less, applies. so they may retain or claim certain types of a decedent’s
property, in accordance with Section 3121 of the Probate,
Estates and Fiduciaries Code. For decedents who died
What property is subject to after Jan. 29, 1995, the family exemption is $3,500.
inheritance tax?
All real and tangible personal property of a PA resident Who is entitled to claim the family
decedent, including but not limited to cash, oil and exemption?
gas rights, automobiles, furniture, antiques and jewelry
located in Pennsylvania at the time of the decedent’s
death, is taxable. All intangible property of a resident The family exemption may be claimed by the spouse of
decedent, including stocks, bonds, bank accounts, loans a decedent who was a resident of Pennsylvania. If there
receivable, etc., is also taxable, regardless of where it is is no spouse or if the spouse forfeited their rights, any
located at the decedent’s death. child of the decedent who is a member of the decedent’s
household may claim the exemption. In the event there
In the case of a nonresident decedent, all real and is no spouse or child, the exemption may be claimed by
tangible personal property located in Pennsylvania at a parent or parents who are members of the decedent’s
the decedent’s death is taxable. Intangible personal household. The family exemption is allowed against
property of a nonresident decedent is not taxable. assets passed with or without a will.
Jointly-owned property with right of survivorship, except
between husband and wife, including but not limited
to real estate, securities and bank accounts, is taxable
based on the decedent’s interest in the joint property.
This interest is calculated by dividing the value of the
joint property by the number of joint owners at the time
of the decedent’s death. Joint property is taxable even
in situations where the decedent’s name was added as a
continued on reverse side
|