Who Must File a PA Inheritance Tax Return?

The Pennsylvania Inheritance Tax is a levy on the value of assets transferred to beneficiaries after an individual’s death. The tax amount is calculated based on the value of the assets and the relationship of the heir to the decedent. While the tax itself is paid from the estate’s assets, the legal duty to prepare and file the necessary tax return falls to a specific individual, determined by the circumstances of the estate.

Determining the Filing Requirement

A Pennsylvania Inheritance Tax Return must be filed for every deceased resident who possessed property that could be subject to the tax. This filing obligation exists regardless of the overall size of the estate or whether any tax will ultimately be due. The requirement also extends to non-residents who owned real estate or tangible personal property physically located within Pennsylvania.

A return is necessary even when assets pass to a tax-exempt beneficiary, such as a surviving spouse. Submitting the return and receiving confirmation from the Department of Revenue serves to formally clear the title to assets, particularly real estate. This provides official documentation that no tax is owed, which is frequently required by financial institutions before a property can be sold or retitled.

Identifying the Responsible Filer

The responsibility for filing the inheritance tax return is assigned based on how the decedent’s estate is administered. If the deceased left a valid will, the executor named in that document is the personal representative responsible for filing. This person has the legal duty to gather the decedent’s assets, pay any debts, and file the necessary tax forms.

In cases where a person dies without a will, a situation known as dying intestate, the court appoints an administrator to manage the estate. This administrator assumes the role of the personal representative and is legally obligated to file the return.

If no personal representative is formally appointed, the legal responsibility for filing shifts directly to the transferees. Any beneficiary, heir, or surviving joint tenant who receives property subject to the tax can be held accountable for ensuring the return is filed.

Information and Documents Needed for the Return

Preparing the Pennsylvania Inheritance Tax Return (Form REV-1500) requires gathering extensive information and documentation. The filer must compile a complete picture of the decedent’s financial situation and details about the beneficiaries. The following information and documents are necessary:

• The decedent’s full legal name, Social Security number, date of death, and last legal address.
• An original death certificate, a complete copy of the will, and any relevant trust documents.
• A detailed inventory of all assets (real estate, bank accounts, stocks, vehicles) valued at fair market value as of the date of death.
• A list of all legitimate liabilities and deductions, such as funeral expenses, estate administration costs, and outstanding debts.
• The full name, current address, Social Security number, and relationship to the decedent for every beneficiary or heir.

The Filing and Payment Process

The deadline for filing the return and paying any associated tax is nine calendar months after the decedent’s date of death. Missing this deadline can result in penalties and interest charges. The penalty for failure to file can be up to 25% of the tax due or $1,000, whichever is less.

An incentive exists for early payment of the inheritance tax. If the estimated tax is paid within three calendar months of the date of death, the estate is entitled to a 5% discount on the tax paid. This discount applies only to the tax paid within that initial three-month window. A prepayment can be made before the full return is filed to secure this discount.

For deceased Pennsylvania residents, the completed return must be filed in duplicate with the Register of Wills in the county where the decedent legally resided at the time of death. For non-residents who owned property in the state, the return is filed directly with the Pennsylvania Department of Revenue.

After the return is submitted, the Department of Revenue will review it. Following the review, the department issues a formal “Notice of Appraisement,” which is the official assessment of the estate’s value and the final determination of the inheritance tax liability.