Pennsylvania Inheritance Tax: Rates and Rules (2026)

Yes. Pennsylvania imposes an inheritance tax on property passing to beneficiaries, and the rate depends on the heir's relationship to the person who died: 0 percent for a surviving spouse, 4.5 percent for children and other direct descendants, 12 percent for siblings, and 15 percent for most other heirs. Deadlines also apply.

For households across Allentown, Bethlehem, and Easton, the practical questions are usually about who pays what, which assets count, and when a return is due. This guide explains the rules as the Pennsylvania Department of Revenue describes them, shows where financial planning fits, and lists questions to bring to your professionals. It is educational and does not apply to any one family.

Sources and as-of date: rates, exemptions, and deadlines come from the Pennsylvania Department of Revenue: its inheritance tax overview, the inheritance tax FAQ (REV-584), the resident return instructions (REV-1500), and the Schedule G instructions (REV-1510). Each was reviewed October 30, 2026. The rate that applies is the one in effect on the date of death, and tax rules change, so check each page for the current version.

Pennsylvania inheritance tax rates by relationship

The Department says the tax is a percentage of the value of a decedent's estate transferred to beneficiaries, and the rate varies with the heir's relationship to the decedent. The rates, as of October 30, 2026, are:

• Surviving spouse: 0 percent. Transfers to a spouse are taxed at 0 percent, and property owned jointly between spouses is exempt.
• Child age 21 or younger, and a parent inheriting from a child age 21 or younger: 0 percent. The Department lists transfers to or for the use of a child 21 or younger from a parent, and to a parent from a child 21 or younger.
• Direct descendants and lineal heirs: 4.5 percent. This covers children (including adopted children and stepchildren), grandchildren and later descendants, and parents and grandparents. REV-1500 also lists the unremarried spouse or widower of a child.
• Siblings: 12 percent. This includes half-siblings. Stepsiblings are taxed at the 15 percent rate.
• Other heirs: 15 percent. This includes nieces, nephews, cousins, friends, and in-laws such as a sister-in-law or brother-in-law, and other beneficiaries that are not charities.
• Charities, qualifying exempt institutions, and government entities: exempt.

The limitation is that the relationship, not the size of the estate, sets the rate, and the categories are narrow. An unmarried partner, for example, is generally in the 15 percent group. REV-1500 says no common-law marriage contracted after January 1, 2005 is valid in Pennsylvania, and transfers to a surviving partner in that situation are taxed at the 15 percent rate. Your attorney can confirm which category applies.

What counts as taxable property

The Department describes the taxable estate broadly:

• A Pennsylvania resident's real and tangible property in Pennsylvania. This includes real estate, cash, vehicles, furniture, antiques, and jewelry.
• A Pennsylvania resident's intangible property, wherever it is located. This includes stocks, bonds, and bank accounts.
• Jointly owned property with right of survivorship, except between spouses. It is taxable based on the decedent's interest, covered below.
• Certain transfers made shortly before death. Property transferred within one year of death for less than adequate payment is reported, with a $3,000 exclusion per recipient per calendar year, according to REV-1510.
• Non-probate property. Assets that pass by beneficiary designation or in trust, such as an IRA, are reported even though they do not go through the will.

Several items can reduce what is taxed. The Department says debts of the decedent, funeral and burial expenses, and costs of administering the estate, including attorney and personal representative fees, are deductible. The family exemption is $3,500 for decedents who died after January 29, 1995, and the spouse, or in some cases a child or parent in the household, may claim it.

The Department also describes exemptions for certain farmland and agricultural property for decedents dying after June 30, 2012, a family-owned business exemption, and an exemption for personal property of a service member who died from an injury or illness received on active duty. Each has conditions, and the farm and business exemptions require continued qualifying use for seven years, so they are a topic for your attorney rather than a general rule of thumb.

Joint accounts and your parents' house

Two situations come up often for families in this area.

Joint bank accounts. Between spouses, jointly held property is exempt. Between others, the Department says the decedent's share is generally the value divided by the number of joint owners, even when a name was added "as a matter of convenience." Its own example describes an adult child who was added to a parent's savings account: the surviving child is taxed on one-half of the account. If the joint interest was created within a year of death, the full value, less $3,000, can be taxable in the decedent's estate. The trade-off is that retitling an account to simplify access may also change who controls the money and how it is taxed.

A parent's house. When a child inherits a parent's home, the transfer is in the 4.5 percent lineal category. The tax is based on the value passing to that child, after allowable deductions, and it is separate from the federal rules. Whether and how the home passes depends on the will, the deed, and any trust, which an estate attorney can review.

Pennsylvania's inheritance tax is also separate from its personal income tax. The Department says inheritances are not taxable for Pennsylvania personal income tax purposes. Our guide to Pennsylvania retirement income tax covers the income tax side.

Retirement accounts and life insurance

Beneficiary-designated assets are an area where the details are easy to miss. As of October 30, 2026, the Department's Schedule G instructions say:

• IRAs. An IRA is fully taxable if the decedent was 59½ or older, or considered disabled at any age. If the decedent was younger than 59½, it is taxable only if he or she was disabled and not subject to the IRS 10 percent early-withdrawal penalty.
• Employer plans. An employer-sponsored retirement or pension plan is exempt if the decedent did not have the right to possess, enjoy, assign, or anticipate the payments during life. REV-584 notes that for a 401(k) the answer turns on whether the owner could have accessed the plan during life without penalty.
• Annuities. The Department says annuities are fully taxable.
• Life insurance. Proceeds on the life of the decedent are not subject to inheritance tax.

The limitation is that these categories depend on plan terms and facts that vary, and a beneficiary designation can still lead to tax at the rate for the heir. Pennsylvania treatment is also separate from federal income tax on inherited accounts. Our financial advice for surviving spouses guide covers spousal rollover choices.

Surviving spouses

For a surviving spouse, the Pennsylvania picture is often the simplest part of a hard time, but it has limits.

• The rate is 0 percent. Transfers to a surviving spouse are taxed at 0 percent, and jointly owned property between spouses is exempt.
• A return may still be needed. REV-1500 says a return must be filed for every decedent who has property that is or may be subject to tax, and it includes an option to note that the spouse is the sole beneficiary. Whether a return is required in your case is a question for the estate's attorney.
• The tax may come later. Assets that pass to a spouse at 0 percent may eventually pass to children at the 4.5 percent rate, so the order in which assets are used and the beneficiaries named at that point matter.
• Trusts for a spouse have their own rules. REV-1500 describes an option to defer or elect to tax certain trusts for the sole use of a spouse. These are legal and tax decisions for an attorney and CPA.
• Family exemption. The spouse of a Pennsylvania resident decedent may claim the $3,500 family exemption.

Our guide for widows and surviving spouses explains what usually cannot wait and what often can, and our estate and legacy planning service describes how beneficiary designations and account titling are coordinated with the estate documents.

Timing, filing, and payment

Deadlines are where a straightforward estate can run into avoidable cost. The Department says:

• The return and the tax are due within nine months of the date of death. Tax becomes delinquent after nine months. Interest runs from nine months and one day.
• A 5 percent discount is available for early payment. If tax is paid within three calendar months of the date of death, the discount is 5 percent of the tax paid or due, whichever is less. The limitation is that paying early means paying before the estate may fully know its assets and debts, and no discount applies to any amount later refunded.
• An extension to file does not extend payment. The Department says an extension request must be made before the return is due, and interest accrues on tax not paid within nine months.
• Late filing can carry a penalty. The failure-to-file penalty is 25 percent of the tax ultimately found to be due or $1,000, whichever is less.
• Who files, and where. The personal representative named in the will, or the administrator approved by the Register of Wills, files the return. For a Pennsylvania resident, it is filed in duplicate with the Register of Wills in the county where the decedent lived.
• Safe deposit boxes. The Department says a box owned by a decedent must be inventoried before its contents are removed, with advance notice to the Department.

These are general rules. Your estate attorney can tell you which dates and forms apply.

If the person who died lived outside Pennsylvania

The rules turn on the decedent's residency and where property is located. Per the Department, for a nonresident decedent, real and tangible personal property located in Pennsylvania is taxable, while intangible personal property is not. If a family member passed away in another state but owned Pennsylvania real estate, the Pennsylvania property can still be reported. The return goes to the Register of Wills in the county where the property is located when letters are obtained there, or to the Department directly when letters come from outside Pennsylvania. Other states have their own rules, so a local attorney is important.

How planning can help

Planning cannot change the rate, which is set by law and depends on the heir. It can help a household understand how its choices fit together. Each step below has a limitation.

• Reviewing beneficiary designations. Many accounts pass by designation, not by will. A review may confirm that names and contingent beneficiaries match your intentions. The trade-off is that a designation can override what a will says, so changes should be coordinated with your attorney.
• Reviewing account titling. Adding a name to an account may simplify access but may also create tax, control, or creditor consequences, as the joint account rules above show.
• Understanding what passes outside the will. Retirement accounts, life insurance, and annuities have different treatment, and the age of the owner can change the answer for an IRA.
• Considering the one-year rule for transfers. Transfers made within a year of death are reported, with a $3,000 exclusion per recipient. Gifting also has other effects, such as giving up control and access to the money, so it is not right for everyone.
• Looking at liquidity. Because the tax is due within nine months, an estate may need cash or a plan for paying it without forcing a sale of a home or an investment at a poor time.
• Coordinating with other advisers. Your financial planner, estate attorney, and CPA each handle different parts of the same picture.

Our estate planning advisor article explains how this coordination works, and our tax planning service looks at how taxes fit into the broader plan. Results depend on individual circumstances and are not guaranteed.

If you are the one receiving an inheritance

A financial planner can help after an inheritance arrives, usually by organizing information rather than by making quick decisions. This may include:

• Listing what was inherited and how each asset is titled.
• Confirming which accounts are pre-tax, Roth, or taxable, since they may be treated differently for income tax.
• Reviewing how new assets may affect your cash flow, your tax picture, and your own estate plan.
• Waiting before making irreversible decisions when no deadline requires one.

The limitation is that a planner does not replace the estate's attorney or CPA, who handle the legal and tax filings. If you want to understand how we work with households, our who we help page describes the people we serve, and our fee schedule explains how we charge.

Questions to bring to your professionals

• Who are the beneficiaries, and which rate applies to each?
• Which assets pass through the will, and which pass by beneficiary designation or joint ownership?
• Are any accounts jointly owned with someone other than a spouse, or were any added in the last year?
• Are there IRAs, annuities, or employer plans, and how does the Department treat each?
• Is a Pennsylvania return required, and who is responsible for filing it?
• Does the estate have enough cash to pay tax within nine months, and does the 5 percent early-payment discount make sense?
• Does any property sit outside Pennsylvania, and does that state have its own rules?

Frequently Asked Questions

Does Pennsylvania have an inheritance tax?

Yes. The Pennsylvania Department of Revenue says inheritance tax is imposed as a percentage of the value of a decedent's estate transferred to beneficiaries, and the rate varies by the heir's relationship to the decedent. The rates are 0 percent for a surviving spouse, 4.5 percent for direct descendants and lineal heirs, 12 percent for siblings, and 15 percent for other heirs, except exempt charities and government entities. Federal rules are separate.

Is a joint bank account subject to Pennsylvania inheritance tax?

It may be. The Department says jointly owned property with right of survivorship is taxable based on the decedent's share, except between spouses, and that share is the value divided by the number of joint owners. That can apply even when a name was added for convenience. If the joint interest was created within a year of death, the full value less $3,000 may be taxable. Joint property between spouses is exempt.

Do I pay inheritance tax if I inherit my parents' house in Pennsylvania?

Generally, a child who inherits from a parent is taxed at the 4.5 percent lineal rate on the value passing to that child, after allowable deductions such as debts, funeral costs, and administration expenses. A child age 21 or younger inheriting from a parent is taxed at 0 percent. The result depends on who inherits, how the home was titled, and its value on the date of death, so an estate attorney can explain how it applies.

What if the person who died lived outside Pennsylvania?

The Department says that for a nonresident decedent, real and tangible personal property located in Pennsylvania is taxable, while intangible personal property such as stocks and bank accounts is not. For a Pennsylvania resident, intangible property is taxable wherever it is located. A nonresident's return is filed with the Register of Wills where the assets are located or, in some cases, directly with the Department of Revenue.

Is life insurance subject to Pennsylvania inheritance tax?

The Department's Schedule G instructions say life insurance proceeds on the life of the decedent are not subject to inheritance tax. An annuity is different, and the Department says annuities are fully taxable. Federal rules are separate, so confirm the treatment of any policy with your attorney or tax professional.

How can families reduce Pennsylvania inheritance tax?

The rate is set by law and depends on the heir's relationship, so planning generally focuses on what passes, to whom, and how accounts are titled and named, rather than on changing the rate. Any step has trade-offs, such as loss of control, possible effects on other taxes, and a one-year look-back for certain transfers. No approach fits every household, so coordinate with an estate attorney and a CPA.

Next Step

If you would like to talk through how Pennsylvania inheritance tax may fit into your planning, you can schedule a conversation with our team. We work alongside your estate attorney and CPA, and any outcome depends on your circumstances. These related resources may help you prepare:

• Estate planning: Estate planning advisor in the Lehigh Valley and our estate and legacy planning service.
• After the loss of a spouse: Financial advice for surviving spouses.
• Pennsylvania taxes: Does Pennsylvania tax retirement income? and tax planning.
• About us: Who we help and our fee schedule.

This article is for general educational purposes only and is not individualized tax, legal, or investment advice. Tax rules change, and results depend on your individual circumstances. Coordinate with a qualified estate attorney and tax professional about your situation.