Legal news, insights and information.

State Inheritance Tax v. Federal Estate Tax

State Inheritance Tax v. Federal Estate Tax this world nothing can be said to be certain, except death and taxes. - Benjamin Franklin

     Yet, upon death, taxes are not necessarily certain.  There are only 6 states which collect an inheritance tax, Pennsylvania being one of them.  This is a tax based on the assets passing as an inheritance to a beneficiary.  In Pennsylvania it is 0% passing to the spouse or a child under the age of 21, 4.5% passing to a lineal heir (adult child, grandchild, etc.), 12% passing to a sibling, and 15% passing to others, such as nieces, nephews and non-relatives.

     If you have a very sizeable estate you may also owe a federal estate tax, which is a tax based on all estate assets regardless of who the beneficiary may be (unless it is a charitable organization).  As of 2019, you would only owe federal estate taxes if your estate was valued at $11.4 million or more. This was increased to $11.58 million for 2020.

     For both inheritance and estate taxes there are a number of ways to reduce the amount that is due through gifting, joint titling of assets and more.  Contact Evashavik Law, LLC to discuss all your options.


Comments (0)