In the state of Pennsylvania, there are four Estate taxes that must be considered and paid by the estate of the deceased. The Pennsylvania Inheritance Tax must be paid within 9 months after the decedent has died. It is worth noting that you get a 5% discount for making a prepayment within 90 days from the time of death.
The Inheritance tax rate depends on how the beneficiary and the deceased are related. Currently, assets inherited by the deceased’s spouse are not taxed.
Distribution of taxes for other relatives are shown below:
|
Beneficiary’s Relation to Deceased |
Percentage of Assets Taxed |
|
Parents, Children, Grandchildren, Grandparents, Step Children, Children’s Spouse, Spouse of Deceased Children |
4.5% |
|
Siblings, Anyone with at least one biological parent in common with the deceased (half-siblings). |
12% |
|
Other beneficiaries e.g friends, nieces/nephews, cousins |
15% |
The estate also has to file the deceased’s final income tax returns (Pennsylvania and Federal) and the Estate’s income tax returns (Pennsylvania and Federal) to complete the remaining two.
It is advisable that the estate representative and inheritors should consult an accountant or attorney for professional guidance in the filing of taxes relating to a deceased’s estate.