Montgomery County, PA

The tax rate for Pennsylvania Inheritance Tax is 4.5 percent for transfers to direct descendants (lineal heirs), 12 percent for transfers to siblings, and 15 percent for transfers to other heirs (except charitable organizations, exempt institutions and government entities which are exempt from tax).  Property owned jointly between husband and wife is exempt from Inheritance Tax, while property inherited from a spouse, or from a child twenty-one or younger by a parent, is taxed a rate of 0 percent. 

 

Inheritance Tax returns are due nine calendar months after a person’s death.  The responsible party is the person named in the will as executor (trix), or if the person dies without a will, the individual who is approved as administrator (trix) by the Register of Wills after a petition is filed.  If no executor or administrator is named, and property or transfers exist, then the person receiving the property is required to file a return and pay the tax.

 

A.  The rate of tax imposed on transfers to or fro a surviving spouse are based on the date of death of the decedent as follows: 

 

Date of death on or after January 1, 1995 -  0% tax 

Date of death after June 30, 1994, and

before January 1, 1995 -   3% tax    

Date of death before July 1, 1994 - 6% tax

  

Q.  Who are considered to be lineal heirs and lineal descendants for the purpose of Inheritance Tax?

 A.    Lineal heirs are grandfather, grandmother, father, mother and their
children. 

 

“Children” include natural children, whether or not they
have been adopted by others; adopted children; and stepchildren.   

 

“Lineal descendants” include all children of the natural parents and their descendants, whether or not they have been adopted by others; adopted descendants and their descendants and step-descendants. 
 

A.   The tax is due at the date of death and becomes delinquent nine months after the date of death.  There is a discount of 5 (five) percent of the tax paid or the tax due, whichever is less, when the payment is made within three months from the date of death.

 

A. All real property and all tangible personal property of a resident decedent, including but not limited to cash, automobiles, furniture, antiques, jewelry, etc., located in Pennsylvania at the time of the decedent’s death is taxable.  All intangible property of a resident decedent, including stocks, bonds, bank accounts, loans receivable, etc., is also taxable regardless of where it is located at the time of the decedent’s death. 

 

In the case of a non-resident decedent, all real property and tangible personal property located in Pennsylvania at the time of the decedent’s death is taxable.  Intangible personal property of a non-resident decedent is not taxable.

 

Jointly-owned property with right of survivorship, except between husband and wife, including but not limited to real estate, securities, bank accounts, etc., is taxable to the extent of the decedent’s fractional interest in the joint property (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 though the decedent’s name was added as a matter of convenience.  Further, if the decedent created the joint interest in the property within a year of his/her death, the full value of the property is taxable in the decedent’s estate.

A. Yes.  Unsatisfied liabilities incurred by the decedent prior to his/her death are deductible against his/her taxable estate.  In addition to debts incurred by the decedent or the estate, the cost of administration of the estate, attorney fees and fiduciary fees incurred to administer the estate, funeral and burial expenses, including the cost of a burial lot, tombstone or grave marker, and other related burial expenses, are deductible.

 
Q. For the sake of convenience, I put my mother’s name on my savings account.  Recently my mother died and now I am being told that I will have to pay an Inheritance Tax on my own money.  Can this be correct? 

A. Under the Inheritance Tax law, the account was jointly-owned because you and your mother had equal access to the account.  Therefore, in this example, the survivor is taxed on the one-half of the amount in the account.

 

Q. Was the “widows’ tax” repealed in Pennsylvania? 

A.    Previously transfers to surviving spouses were taxed and this was commonly known as the “widows’ tax”. The tax rate for transfers to a surviving spouse is now zero when the decedent died on or after January 1, 1995. A Pennsylvania widow or widower pays no tax on assets, which are inherited, from a deceased spouse. 

 

A. The family exemption is a right given to specific individuals to retain
or claim certain types of a decedent’s property in accordance with Section 3121 of the Probate, Estate and Fiduciaries Code. For decedents dying after January 29, 1995, the family exemption is $3,500. From June 27, 1974, through January 29, 1995 the amount of the family exemption was $2,000.   

 

A. The family exemption may be claimed by a spouse of a decedent who died as a resident of Pennsylvania. If there is no spouse, or if the spouse has forfeited his/her rights, then any child of the decedent who is a member of the same household as the decedent may claim the exemption.

 

In the event there is no spouse or child, the exemption may be claimed by a parent or parents who are members of the same household as the decedent. The family exemption is allowable against assets which are passed on with or without a will.

 

A. If the decedent was a resident of the Commonwealth of Pennsylvania at the time of his/her death, the Inheritance Tax return is to be filed in duplicate with the Register of Wills in the county where the decedent was a resident at the time of his/her death.

 

If the decedent was a not a resident of the Commonwealth of Pennsylvania and had property located within Pennsylvania.  The Inheritance Tax return along with any payments due shall not be filed with the Register of Wills, but with the Non-Resident Tax Unit of the PA Department of Revenue, Attention:  John Reidman. 

 

For additional information, call (717) 787-8327 or write to the Inheritance Tax Division at:

 

PA Department of Revenue
Bureau of Individual taxes
Dept. 280601
Harrisburg, PA 17128-0601

 

The Pennsylvania Department of Revenue is striving to serve you better by offering a variety of ways to get information.

 

Email address:
parev@state.pa.us 

 

Call or visit the Department’s district office nearest you, which is listed in the blue pages of your telephone directory.

 

Rev-584 PO (01-01)