Verified against the Pennsylvania Department of Revenue · Updated August 27, 2026
What Assets Are Subject to Pennsylvania Inheritance Tax? (2026)
Almost everything the person who died owned — whether or not it went through probate. Pennsylvania taxes real estate located in the state, bank and brokerage accounts, vehicles, business interests, the decedent's share of jointly owned property, and retirement accounts the decedent could already draw on. The short list of what it does not reach — life insurance, a spouse's share, real estate outside Pennsylvania, most IRAs of people under 59½ — is where the planning happens.
Calculate Pennsylvania inheritance tax for a specific heirWhat is taxable
For a Pennsylvania resident, the Department of Revenue's own summary (REV-584) is blunt: all real and tangible personal property located in Pennsylvania, and all intangible property — stocks, bonds, bank accounts — wherever it is located. In practice that means:
- Real estate in Pennsylvania — the home, rental property, land — at fair market value on the date of death.
- Bank, brokerage and investment accounts, certificates of deposit, and cash.
- Jointly owned property, at the decedent's fractional share (half, with two owners). One trap: if the decedent created the joint ownership within a year of death, the full value is taxed, less $3,000 — the state treats a last-minute retitling as the gift it usually is.
- Payable-on-death, transfer-on-death and “in trust for” accounts — these skip probate but not the tax, because the decedent could revoke them until death.
- IRAs and other retirement accounts if the decedent was 59½ or older (or disabled); annuities in full. See the FAQ below for the age rule.
- Gifts made within one year of death, to the extent they exceed $3,000 per recipient per calendar year — pulled back into the taxable estate.
- Vehicles, business interests, and tangible personal property — furniture, jewelry, collections.
What is not taxable
- Life insurance proceeds — exempt in full, whoever the beneficiary is (72 P.S. § 9111(d)).
- Property owned jointly by spouses, and anything passing to a surviving spouse — the spousal rate is 0%.
- Real estate outside Pennsylvania — the state taxes only real and tangible property located within its borders (the other state may tax it instead).
- Retirement accounts of a decedent under 59½ who was not disabled, and employer plans the decedent had no right to draw on.
- Transfers from a child aged 21 or younger to a parent — taxed at 0%.
- Qualifying family farms and family-owned businesses, under exemptions with their own holding-period and use conditions.
Separately, the estate deducts the decedent's debts, funeral and burial costs, administration expenses including attorney fees, and a $3,500 family exemption before the rate is applied.
The rate depends on the heir, not the asset
Once the taxable estate is set, every dollar is taxed at a flat rate fixed by the heir's relationship to the decedent — there is no exemption amount to subtract first. Children, grandchildren, parents and their spouses pay 4.5%; siblings pay 12%; everyone else — nieces, nephews, cousins, friends, an unmarried partner — pays 15%. Charities and government entities are exempt.
Worked example. A Pennsylvania estate leaves $400,000 — say a house and a brokerage account — to one person. Left to a daughter, the tax is $18,000. The same $400,000 left to a brother costs $48,000, and left to a niece, $60,000. Same assets, three different bills — which is why “what is taxed” is only half the question in Pennsylvania.
Filing and paying
The return is the REV-1500, filed with the Register of Wills in the county where the decedent lived. Tax is due at death and becomes delinquent nine months later; paying within three months of death earns a 5% discount. Pennsylvania has no cliff and no exemption threshold, so even a modest estate going to a niece generates a bill — run the number before distributions are made, not after.
Frequently asked questions
Is life insurance subject to Pennsylvania inheritance tax?
No. Proceeds of insurance on the decedent's life are exempt from Pennsylvania inheritance tax regardless of who the beneficiary is (72 P.S. § 9111(d)) — this is the single largest category of wealth that passes outside the tax.
Is an IRA or 401(k) taxable in Pennsylvania?
It depends on the decedent's age. The Department of Revenue's Schedule G instructions state that IRAs are fully taxable if the decedent was 59½ or older (or disabled at any age), because the owner could have withdrawn without the federal early-withdrawal penalty. Under 59½, the IRA is generally not taxable. Employer plans are exempt where the decedent had no right to possess, assign or anticipate the payments.
Is there any exemption amount before Pennsylvania inheritance tax starts?
No. Pennsylvania has no exemption threshold — the rate applies from the first dollar once the estate's deductions (debts, funeral and administration costs, and the $3,500 family exemption) are taken. What changes the bill is the heir's relationship: 4.5% for children, grandchildren and parents, 12% for siblings, 15% for everyone else, 0% for a surviving spouse.
Related
The Pennsylvania inheritance tax calculator page has the full class table and statute references; the state-by-state comparison shows how the same inheritance is taxed in the four other inheritance-tax states; and the executor's checklist covers the federal filings that run alongside the REV-1500.