To avoid interest and penalties, the Pennsylvania Inheritance Tax must be paid within 9 months of the date of death. As executor, you are responsible to make the payment. If you delay and interest or penalties are created, the beneficiaries may demand that you be held responsible.
To encourage you to make the payment early, the Commonwealth gives the estate a discount of 5% of the lesser of the tax paid or the tax due if you make payment within 3 months of the date of death.
This encourages executors to guess at the amount due and make early payment. When the actual tax return is filed and the correct tax due calculated, the 5% discount is applied.
If you overpaid, you get a discount on the tax due and the estate receives a refund. If you underpaid, you get the discount on the tax you actually paid but you pay the outstanding amount at the full rate without a discount.
If you have questions about probate in Delaware County, Pennsylvania, feel free to contact our office for a free consultation.
Wills, Trusts and Estates, It’s all we do!
Peter Klenk, Esq