New Law for 2020
Children Under 21 Inherit Tax Free from Parents
Good news for parents of children under 21, your children will inherit from you with no inheritance tax. The Pennsylvania state government passed the law last year changing the tax rate from 4.5% to 0 for children under 21 inheriting from a parent. The law went into effect for 2020. Current state inheritance tax now stands as follows:
Pennsylvania Inheritance Tax Rate
|Tax Rate||Beneficiary Category|
|0%||Spouses, charities, government, parents from children under 21, children under 21 from parents|
|4.5%||Children, grandchildren and all direct lineal descendants|
As a reminder, these tax rates only apply to Estates of people who reside in Pennsylvania (at the time of their death) or real estate that is within Pennsylvania. Federal inheritance tax is imposed only on Estates worth over 11.58 million for 2020.
Questions about who is subject to tax or at what rate? Come to our FREE Workshop where we discuss these issues along with other essentials everyone should know.