Pennsylvania Inheritance Tax in 2026: Current Rates, Rules, and Filing Deadlines

Pennsylvania's inheritance tax remains one of only six state-level inheritance taxes in the country, and the 2026 rates are unchanged from prior years. Unlike the federal estate tax, which exempts the first $15 million per individual, Pennsylvania taxes inheritances starting at the very first dollar — with no general exemption.

Here's what executors and families need to know for deaths occurring in 2026.

2026 Rate Structure

The tax rate depends entirely on the beneficiary's relationship to the deceased:

Stepchildren are classified alongside biological children at 4.5%. Charities and government entities are exempt.

These rates have not changed in over a decade. No legislation is pending in the Pennsylvania General Assembly to modify them for the 2026 or 2027 tax year.

The Date-of-Death Appraisal Requirement

Every asset in the estate must be valued at fair market value as of the date of death. For real estate, this creates a specific requirement that catches many executors off guard.

Under Pennsylvania law (63 P.S. § 455.608a), a real estate agent's Comparative Market Analysis (CMA) or Broker Price Opinion (BPO) cannot be used for estate tax filings unless there is an active or contemplated transaction. If you're dividing the estate among heirs or filing the REV-1500 inheritance tax return, a formal retrospective date-of-death appraisal by a Certified Residential Appraiser is legally required.

This appraisal also establishes the stepped-up basis under IRC Section 1014 — the new cost basis for capital gains purposes if heirs later sell the property. Getting the appraisal right protects heirs from overpaying both inheritance tax and future capital gains tax.

Expect to pay $300–$600 for a standard residential appraisal. Complex properties (multi-unit, farmland, commercial) cost more and may require specialized valuation.

Key Filing Deadlines

• 3 months after death: Deadline to make an estimated prepayment and claim the 5% discount on the total tax due
• 9 months after death: Deadline to file Form REV-1500 (Pennsylvania Inheritance Tax Return) with the county Register of Wills
• Interest accrues on unpaid tax after 9 months at the statutory rate

The 5% discount applies to the entire amount prepaid — not just a portion. On a $50,000 tax obligation, prepaying within three months saves $2,500.

Form REV-1500: What's Filed

The return includes Schedules A through O, covering:

• Real estate (Schedule A)
• Stocks, bonds, and securities (Schedule B)
• Closely held businesses (Schedule C)
• Mortgages, notes, and cash (Schedule D)
• Joint property interests (Schedule F)
• Transfers within one year of death (Schedule G)
• Life insurance (Schedule H)
• Funeral expenses and administrative costs (Schedule I)

The return is filed with the Register of Wills in the county where the decedent was domiciled — not with the Department of Revenue directly.

What Changed With Act 50 of 2025

The most significant recent change affects small estates. Under 20 Pa.C.S. § 3101(b), as amended by Act 50 of 2025, financial institutions can now release up to $20,000 in deposit accounts directly to eligible family members without formal Letters of Administration. The previous threshold was $10,000.

This helps families access immediate funds for funeral expenses and pressing bills, but it does not exempt the assets from inheritance tax. The tax is still owed — the release simply removes the probate bottleneck for small accounts.

Where Healthcare Planning Fits

The inheritance tax return is one of the last steps in a process that begins with healthcare decisions. Documenting your wishes with a Pennsylvania Advance Directive establishes who makes medical decisions, how assets are structured, and which documents the executor needs to file a clean return.

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