PA Executor Guide

What Assets Are Subject to PA Inheritance Tax?

As executor, one of your first jobs is taking inventory — and knowing which of those assets the tax actually reaches.

Short answer: most things a Pennsylvania resident owns at death are taxable — real estate, bank accounts, investments, vehicles, and business interests. The big exceptions are life insurance, most retirement accounts, and property held jointly with a spouse.

Pennsylvania inheritance tax is based on the value of the assets that pass at death, then taxed at a rate set by the heir's relationship to the decedent. Before you can calculate anything, you need to know what goes on the inventory — so here's the working list.

Assets that ARE generally subject to PA inheritance tax

Asset	Notes
Real estate in Pennsylvania	The decedent's home and any other PA real property, at fair market value as of the date of death.
Bank & savings accounts	Checking, savings, CDs, money market accounts held by the decedent.
Stocks, bonds & brokerage accounts	Investments held individually, valued at the date of death.
Vehicles & valuable personal property	Cars, boats, jewelry, collectibles, art, and similar tangible property.
Business interests	Sole proprietorships, partnership interests, and shares in a closely held company (a family-business exemption may apply in limited cases).
Jointly held (non-spouse) property	Generally the decedent's fractional share is taxable.

Assets that are generally EXEMPT

Life insurance proceeds. Insurance on the decedent's life is generally exempt — whether it goes to a named beneficiary or to the estate. (A product that functions as an annuity rather than true life insurance can be treated differently.)
Most retirement accounts. IRAs and many 401(k)-type plans are often not subject to PA inheritance tax when the decedent was under 59½ or couldn't have withdrawn the funds without penalty during life. The answer depends on the plan and the decedent's age.
Property owned jointly between spouses. Fully exempt.
Transfers to a surviving spouse (0%) and to qualified charities and government (exempt).
Certain farmland and agricultural property passing to eligible family members (deaths after June 30, 2012).
A service member's personal property where death resulted from a service-related injury or illness (effective September 6, 2022).

What you can deduct

The tax is on the net estate, so certain costs reduce the taxable value — typically funeral expenses, estate administration costs, and the decedent's unpaid debts. Keeping clean records of these from day one directly lowers the tax, which is one reason a good expense log is part of every executor's toolkit.

Why this matters for the timeline: the Pennsylvania inheritance tax return (REV-1500) is due nine months after death, with a 5% discount if you pay within three months. Getting the inventory right early is what makes that discount achievable. See also: how long PA probate takes.

Turn your inventory into a filing-ready system

The PA Executor Compliance Kit gives you the asset inventory, expense log, REV-1500 deadline calendar, and a court-ready records system — so nothing taxable (or deductible) slips through.

Open the free PA calculator → See the PA Compliance Kit

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Frequently asked questions

What assets are subject to PA inheritance tax?

Pennsylvania inheritance tax generally applies to a resident's real estate located in Pennsylvania, bank and savings accounts, stocks, bonds and brokerage accounts, vehicles, valuable personal property, and business interests. Most assets owned by a Pennsylvania resident at death are included in the taxable estate.

Is life insurance subject to PA inheritance tax?

No. Life insurance proceeds paid on the death of the insured are generally exempt from Pennsylvania inheritance tax, whether paid to a named beneficiary or to the estate. Products that function as annuities rather than life insurance can be treated differently.

Are retirement accounts subject to PA inheritance tax?

Often not. IRAs and many 401(k)-type plans are generally not subject to Pennsylvania inheritance tax when the decedent was under 59½ or could not have withdrawn without penalty during life. The treatment depends on the plan and the decedent's age, so confirm specifics with the PA Department of Revenue or a CPA.

Is jointly owned property taxed in PA?

Property owned jointly between spouses is exempt. Property owned jointly with someone other than a spouse is generally taxed on the decedent's fractional share.

Are annuities subject to PA inheritance tax?

Generally yes. Unlike true life insurance (which is exempt), annuities and insurance products that function as annuities are typically included in the taxable estate. Because the line between the two can be technical, confirm how a specific contract is treated with the PA Department of Revenue or a CPA.

Does PA inheritance tax apply to out-of-state beneficiaries?

Yes. The tax follows the estate, not the heir's address: it applies to a Pennsylvania resident's taxable assets (and PA real estate) regardless of where the beneficiary lives. An heir in Florida pays the same rate as one in Philadelphia, based on their relationship to the person who died.

Sources. Written from the primary sources, not from secondary summaries: PA Department of Revenue — Inheritance Tax · PA Department of Revenue — Inheritance Tax Forms. Links verified August 2026.

The house passed automatically by right of survivorship. How do we get their name off the deed?

These are two separate questions with two different answers, and it helps to keep them apart. On the title: property held with right of survivorship passes to the surviving owner at death without going through probate, and clearing the deceased owner’s name from the record is usually a recording step at the county Recorder of Deeds rather than a court process — requirements vary by county, so that office is the place to ask what they need. Many people handle it themselves, and where a lawyer is used it is typically a small flat-fee item rather than an open-ended engagement. On the tax: skipping probate does not skip the inheritance tax. Pennsylvania still taxes the transfer at the rate for the relationship — 4.5 percent to a child or other lineal heir — and for property held jointly with someone other than a spouse the tax is generally computed on the decedent’s fractional share. The 9-month delinquency date and the 5 percent early-payment discount apply just the same.

General information, not advice. ExecutorPilot is an educational resource — not a law firm or a tax advisor — and this page does not interpret your specific estate. What's taxable, exempt, or deductible depends on the facts and can change. Confirm the treatment of any specific asset with the Pennsylvania Department of Revenue, a CPA, or a licensed Pennsylvania attorney before acting. Reflects Pennsylvania Department of Revenue guidance current as of 2026.