How to Calculate PA Inheritance Tax

How the Tax Is Calculated

Pennsylvania inheritance tax is imposed on the transfer of property at death under 72 P.S. § 9116. The math is simple once you know two numbers: the net value passing to a beneficiary and that beneficiary's rate. Each beneficiary class is taxed at its own flat rate, and the rate depends only on the relationship between the decedent and the person receiving the property.

The rate applies to the net value transferred, meaning gross value minus allowable deductions. Deductions include the decedent's debts and liens (Schedule I) and funeral and administrative expenses (Schedule H). You subtract those first, then apply the rate. The basic formula is the same in every estate:

Net value to the beneficiary × the beneficiary's rate = tax due.

Two narrow exceptions lower a lineal rate to 0%. For deaths on or after January 1, 2020 (Act 13 of 2019), transfers to or for the use of a child age 21 or younger from a natural parent, adoptive parent, or stepparent are taxed at 0%. Transfers running the other way, from a child age 21 or younger to a natural parent, adoptive parent, or stepparent, are also taxed at 0% under 72 P.S. § 9116(a)(1.2).

Worked Examples by Beneficiary Class

The examples below assume the net value has already been figured, meaning debts and expenses are subtracted. Each one shows the tax due and the amount the estate keeps if it pays the full tax within three months and claims the 5% discount.

Example 1. Surviving spouse (0%). A husband leaves $600,000 to his wife. A surviving spouse is taxed at 0%, so the tax is $0. Property held between spouses with right of survivorship is exempt and ordinarily does not need to be reported on a schedule (72 P.S. § 9111(m)). If the decedent created that survivorship co-ownership as a gift within one year of death, the interest is reported and taxed as part of the decedent's estate under 72 P.S. § 9107(c)(3), still at the 0% spousal rate.

Example 2. Children and lineal heirs (4.5%). A parent leaves $500,000 in net value to two children. The lineal rate is 4.5%. The tax is $500,000 × 4.5% = $22,500. Pay within three months and the 5% discount is $1,125, leaving $21,375.

Example 3. A sibling (12%). A decedent leaves $300,000 in net value to a brother. The sibling rate is 12%. The tax is $300,000 × 12% = $36,000. The 5% discount is $1,800, leaving $34,200 if paid within three months.

Example 4. A niece or friend (15%). A decedent leaves $100,000 in net value to a niece. A niece is taxed at the 15% rate that applies to most beneficiaries outside the spouse, lineal, and sibling classes. The tax is $100,000 × 15% = $15,000. The 5% discount is $750, leaving $14,250.

When an estate passes to more than one class, you run the calculation separately for each share. The beneficiaries and their shares are listed on Schedule J, and the cover sheet of the REV-1500 applies each rate to the matching share. The bottom-line tax is the sum of those separate calculations.

Real Estate: Valuing With the CLR

Real estate is where the calculation gets harder, because the hard part is not the rate, it is the value. Pennsylvania real estate is reported on Schedule A at fair market value as of the date of death. The Department of Revenue does not simply accept whatever number you report. It cross-checks your value against the county assessment multiplied by the Common Level Ratio (CLR).

In Bucks County, the current CLR factor is 17.86 (July 2026 to June 2027). Take a home assessed at $20,000:

$20,000 assessed value × 17.86 CLR = $357,200 computed fair market value.

That $357,200 is the figure the Department expects to see on Schedule A. Report a number well below it without a professional appraisal and the estate will receive a deficiency notice. Now apply the rate. If that home passes to a child at the 4.5% lineal rate:

$357,200 × 4.5% = $16,074 in tax.

Pay within three months and the 5% discount is $803.70, leaving $15,270.30. If the estate can support a lower value with a qualified appraisal, it may report the appraised figure instead, but the CLR computation is the floor the Department starts from.

The 5% Early-Payment Discount

The REV-1500 return is due within nine months of the date of death. The discount runs on a tighter clock. If you pay the full tax within three months of death, the estate receives a 5% discount on the total tax due. The math is one step:

Tax due × 5% = the amount the discount saves.

On the $500,000 estate passing to children above, the tax is $22,500 and the discount saves $1,125. Even if you cannot prepare the full return within three months, you can make an estimated pre-payment to the Register of Wills and still claim the discount on the amount paid. This is one of the most commonly missed opportunities in estate administration.

Interest accrues on unpaid tax beginning nine months and one day after death. An extension to file using Form REV-1846 does not extend the time to pay, so interest still accrues after nine months. Pennsylvania also does not allow amended returns, which is one more reason to get the value and the classification right the first time. For the full schedule-by-schedule walkthrough, see our REV-1500 Schedules Guide, and for rates, deadlines, and traps, see the complete inheritance tax guide.

Frequently Asked Questions

Do not run these numbers on a guess. I prepare Pennsylvania Inheritance Tax Returns for estates in Bucks County and the surrounding counties, value every share correctly, and protect the 5% discount. Call 215-949-0888 or request a free consultation today.

Legal and factual content on this page was last verified: Aug. 2026. If you are reading this significantly after that date, confirm key provisions with current statute text or contact our office.