by HARRISBURG, PA – Pennsylvania State Representative Valerie Gaydos (R-Allegheny) has introduced House Bill 1394, aimed at repealing the Pennsylvania Inheritance Tax, commonly referred to as the “death tax.” Gaydos says the legislation would ease financial stress on families during emotionally difficult times.
“Pennsylvania is one of only six states still taxing inheritances,” Gaydos stated. “When a family loses a loved one, they shouldn’t receive a tax bill. The inheritance should stay with the people it was intended for—not go to the state.”
Under current law, the Pennsylvania Inheritance Tax applies to the value of an estate passed down to heirs, with varying rates depending on the beneficiary’s relationship to the deceased:
- 0% for transfers to a surviving spouse or from a child (21 or younger) to a parent
- 4.5% for direct descendants and lineal heirs
- 12% for siblings
- 15% for other heirs (excluding charities, exempt institutions, and government entities)
Gaydos argues the tax discourages families and businesses from staying in Pennsylvania. “This is another reason high-net-worth individuals and business owners leave for more tax-friendly states,” she said. “If we want to grow and retain our population, we must modernize.”
Unlike the federal estate tax, which in 2023 had an exclusion threshold of $12.92 million, Pennsylvania’s inheritance tax offers no similar exemption. This means many middle-class families face significant financial strain.
“The federal government raised estate tax thresholds to protect families,” Gaydos added. “It’s time Pennsylvania does the same. Eliminating this tax will help people pass on their assets without added stress during a time of grief.”
House Bill 1394 is currently under review by the House Finance Committee.
