If you may soon come into an inheritance, you might wonder how the taxes on it work. Taxes are complex, so it’s important to know what to do before the taxes are due.
Keep reading to learn if your inheritance tax may be paid in installments.
Pennsylvania Inheritance Tax
According to the Pennsylvania Department of Revenue, the inheritance tax rate is based on the relationship between the heir and the decedent.
Inheritance tax rates for Pennsylvania residents are as follows:
0% - transfers to a surviving spouse or to a parent from a child aged 21 or less
4.5% - transfers to direct descendants and lineal heirs
12% - transfers to siblings
15% - transfers to other heirs, excluding charitable entities, exempt institutions, and government entities exempt from tax
Any property that is jointly owned between spouses is excused from inheritance tax.
Paying the Inheritance Tax
The Pennsylvania Department of Revenue states that you must pay inheritance taxes upon the death of the decedent. In fact, the payments become delinquent if they are not paid within nine months following the death.
Said simply, inheritance taxes may not be paid in installments in the state of Pennsylvania. Instead, this tax must be paid when your family member passes and you receive the inheritance.
Inheritance Tax Discount
While you may not be able to make your inheritance tax payments in installments, you may be eligible for a discount.
A 5% discount is allowed for your inheritance tax payment that is made during the first three months after the death of your loved one.
We’re Here for You
If your loved one has recently passed, you are probably dealing with all sorts of details related to their death. If there are issues with your inheritance, we may be able to help. Don’t hesitate to contact our office right away to discuss your options.
Call Legacy Enhancement Trust today at (888) 988-5503 to learn how we may assist you!