How to Complete the Pennsylvania Inheritance Tax Return: A Practical Guide for Executors and Families

Understanding the PA Inheritance Tax Return (REV‑1500)

The Pennsylvania Inheritance Tax Return (Form REV‑1500) is required for nearly every estate where a Pennsylvania resident passes away owning taxable property. It must also be filed for non‑residents who own Pennsylvania real estate or tangible personal property at the time of death.

This return is not only the filing that calculates inheritance tax—it often serves as the foundation for the entire estate administration process, guiding how assets are reported, valued, and distributed.

When the PA Inheritance Tax Return Must Be Filed

The return is due nine months after the decedent’s date of death, though estates may request an extension in writing prior to that deadline. Extensions do not stop the accrual of interest, so early payment is often advantageous.

If any portion of the tax is paid within the first three months, the estate receives a 5% discount on that amount—an effective 10% annualized return. Because of this, many executors choose to estimate and prepay tax early when liquidity allows.

Where to File the Return

For Pennsylvania residents, the return must be filed in duplicate with the Register of Wills in the county where the decedent resided. Some counties require a third copy because they treat the return as an estate inventory.

Non‑resident returns are filed directly with the PA Department of Revenue, along with a required Affidavit of Domicile.

Filing the Correct Type of Return

The REV‑1500 offers several filing types, including:

• Original Return

• Supplemental Return (when additional assets or deductions are discovered later)

• Individual Transferee Return (when no personal representative exists)

• Remainder Return (for certain older trusts)

Pennsylvania does not recognize amended returns. If an error is made, the estate must either file a supplemental return (for newly discovered items) or request an administrative correction directly with the Department of Revenue.

Completing the PA Inheritance Tax Return: Step‑by‑Step

1. Completing the Cover Sheets

The return begins with multi‑page cover sheets that capture identifying information and key elections. The Department now requires use of its scanner‑friendly version of the form.

You’ll need to include:

• Decedent’s full name, date of birth, date of death, and Social Security number

• Surviving spouse’s name (but not their SSN, even though the form provides a space)

• The personal representative’s or attorney’s contact information

• Will attachments (if the decedent died testate)

• Checkboxes for spousal transfers, litigation proceeds, agricultural exemptions, business interests, trusts, safe deposit boxes, and more

2. Completing the Recapitulation

The recapitulation summarizes all the schedules included in the return. Each schedule’s total value is carried to this page, which then calculates:

• Total assets

• Total deductions

• Net taxable estate

• Charitable and spousal exemptions

• Final taxable amount

Special boxes allow “Separate Billing Requested” for jointly‑owned or non‑probate assets taxed directly to transferees.

3. Tax Computation

Pennsylvania inheritance tax rates vary based on the beneficiary’s relationship to the decedent:

• 0% – Transfers to a surviving spouse; transfers from a child (21 or younger) to a parent

• 4.5% – Transfers to lineal descendants (children, grandchildren, parents)

• 12% – Transfers to siblings

• 15% – Transfers to all others (including nieces, nephews, non‑relatives)

Lines 15‑19 of the return break these transfers down by taxable class and calculate total tax owed.

4. Reporting Real Estate: Schedule A

Schedule A lists all Pennsylvania real estate owned individually or as a tenant in common. Proper valuation is critical, and the document outlines acceptable methods:

• Appraisal by a qualified professional

• Actual sales price if sold within 15 months of death

• County tax assessment adjusted by the common level ratio

• State Tax Equalization Board ratio

Executors may also request valuation “suspension” when property will likely sell below appraisal, helping avoid overstating taxable value.

5. Reporting Stocks and Bonds: Schedule B

Publicly traded securities are valued by averaging the high and low prices on the date of death. If no trading occurred that day, special valuation formulas apply.

The schedule also requires:

• CUSIP numbers

• Dividend amounts declared but unpaid

• Interest accrued but not paid

• Special rules for U.S. Savings Bonds (redeemable value is used)

6. Reporting Businesses: Schedule C

Closely held business interests, partnerships, and sole proprietorships require extensive documentation, including:

• Multi‑year balance sheets

• Income statements

• Shareholder or partner lists

• Real estate holdings

• Appraisals and valuation methods

• Documentation supporting discounts for lack of marketability, minority interests, or blockage

7. Mortgages and Notes Receivable: Schedule D

This schedule includes all debts owed to the decedent. Valuation may incorporate discounts for uncollectibility or below‑market interest rates.

8. Cash, Bank Deposits, Personal Property: Schedule E

Schedule E includes bank accounts, cash, vehicles, jewelry, furniture, and miscellaneous property. Appraisals are required if any single item exceeds $3,000 or a category exceeds $10,000. Life insurance on the decedent’s own life is exempt.

9. Jointly‑Owned Property: Schedule F

Joint assets (other than those with a surviving spouse) are included based on the decedent’s fractional share, typically 1 divided by the number of owners. Entireties property with a spouse is exempt.

10. Lifetime Transfers and Non‑Probate Assets: Schedule G

This schedule captures:

• Gifts within one year of death (over $3,000 per donee)

• Assets with beneficiary designations

• Revocable transfers

• Certain retained interests and promises to support

• Non‑probate securities accounts, IRA distributions, and more

11. Funeral and Administrative Deductions: Schedule H

Estates may deduct funeral expenses, attorney’s fees, fiduciary commissions, appraisal fees, probate costs, real estate taxes for the year of death, and more. These must be reasonable and documented.

12. Debts of the Decedent: Schedule I

All legitimate debts—utility bills, credit cards, medical bills, mortgages, joint obligations, loans, and deductible liabilities—are reported here. Certain restrictions apply to out‑of‑state property and marital settlement‑related obligations.

13. Beneficiaries: Schedule J

The Department of Revenue uses Schedule J, along with the Will, to confirm inheritance tax rates based on beneficiary class. Gifts to spouses or charities are listed separately as non‑taxable transfers.

After Filing: Appraisements, Protests, and Next Steps

Once submitted, the Department of Revenue issues a Notice of Inheritance Tax Appraisement, accepting the return or making adjustments. Estates have 60 days to protest or appeal. The document outlines detailed procedures for protests, appeals, and compromise offers.

Final Thoughts

Preparing the PA Inheritance Tax Return is one of the most technical aspects of estate administration. It requires careful documentation, precise asset valuation, correct classification, and awareness of exemptions, deductions, and filing deadlines. Because errors can result in penalties, interest, or even personal liability for executors, professional guidance is strongly recommended.

Call the Ament Law Group for Assistance

If you’re responsible for filing a Pennsylvania Inheritance Tax Return—or simply need guidance understanding your obligations—the attorneys at the Ament Law Group can help. Our experienced estate administration team can prepare or review your return, ensure compliance with Pennsylvania law, and help you avoid costly errors.
Call today to get the support you need.