Inheritance Tax Rates

In 2009, in order to be subject to Federal Estate tax, an estate must exceed $3,500,000 in value. The maximum tax rate for 2009 is 45%. By the year 2010, the Federal Estate tax is eliminated!! This means that in the year 2010, no one leaving an estate of any size will pay a Federal estate tax. Unfortunately, on January 1, 2011, the Federal Estate returns with a vengeance. The tax automatically comes back for any estate exceeding $1,000,000, with a maximum rate of taxation of 55%.

In Pennsylvania, there are technically three different rates of taxation. The first rate of taxation is zero percent for assets that are left to a spouse. If you are giving an inheritance to children, grandchildren, and/or stepchildren, the rate of taxation is 6%. If you pass on property to others, the rate is 15%.

 

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