Is there a limit on the PA Inheritance Tax?
Posted on Thu Nov 13, 2014, on Probate and Estate Administration
From our “Ask a Question” Mailbag: Limit on PA Inheritance Tax Questions
Most Recently Updated July 7, 2018
“Is there a limit on PA Inheritance tax?”
Limit on PA Inheritance Tax Questions
Each Pennsylvania estate is subject to two potential estate related taxes; the Pennsylvania Inheritance Tax and the Federal Estate Tax. When you mention a “limit”, you are speaking about the Federal Estate Tax, not the Pennsylvania Inheritance Tax.
The Federal Estate Tax
The Federal Estate Tax exempts the first $11,000,000.00 (this goes up each year adjusted for inflation) of each estate from taxation. This means that if the estate’s value is under $11,000,000.00 there is no Federal Estate Tax due. (see the IRS website for the most recent exemption number).
The Pennsylvania Inheritance Tax
For the Pennsylvania Inheritance Tax, there is no “limit”. If the estate even has $1.00 a tax is due. The tax is levied on the “net value” of the estate, which is the fair market value of all assets, reduced by liabilities. The amount of the tax depends on the recipient. For example, if the beneficiary is a child, the tax rate is 4.5% of the net estate value, but if the beneficiary is a sibling, the tax rate is 12%.
Anything more on taxes I need to know?
There are some subtleties to the taxes, such as that life insurance proceeds are not taxed by Pennsylvania, but they are subject to the Federal Estate Tax. If you are not familiar with these taxes, you are well advised to retain an experienced Probate Attorney to help you prepare and file the return. As a bonus, the cost of your attorney is deductible against both the Pennsylvania Inheritance Tax and the Federal Estate Tax!
More Probate Questions?
The PA Inheritance Tax is only part of the overall probate process. By all means, if you wish to learn more, please read my more detailed article, The Probate Process All You Need to Know.
In Conclusion: Limit on PA Inheritance Tax Questions
I hope that this article was helpful in explaining the limit on PA Inheritance Tax. Further, I included links to even more detailed information on my website. Therefore, please contact me and let me know how I did. Certainly, your comments and questions are welcome!
Let our Probate Lawyers help walk you through what can be a confusing process. To begin with, call to speak to one of our experienced Probate Attorneys. By all means, our lawyers are ready to answer your questions. In fact, feel free to contact our office for a free consultation. Ultimately our goal is to make the process as painless as possible!
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Peter Klenk, Probate Lawyer
Tags:Death taxes, Estate Tax, Inheritance Tax, Pennsylvania, Pennsylvania Inheritance Tax rates, Philadelphia, Probate, Probate Attorney, Probate Lawyer