Pennsylvania Inheritance Tax: A Push for Abolition Gains Momentum
Pennsylvania is one of just a handful of states that still levies an inheritance tax, a policy critics call a “death tax” that unfairly burdens families during times of grief. Now, a bipartisan effort led by State Representative Valerie Gaydos is gaining traction to eliminate the tax altogether. House Bill 1394, sponsored by Rep. Gaydos, aims to repeal the provisions relating to inheritance tax within the state’s Tax Reform Code of 1971.
Understanding Pennsylvania’s Inheritance Tax
Currently, Pennsylvania’s inheritance tax impacts estates based on the relationship of the beneficiary to the deceased. While spouses and children under 21 are exempt, other relatives are taxed on the first dollar inherited, with rates reaching up to 15%. As reported by WTAE, the state collects approximately $1.7 billion annually from this tax.
The Argument for Abolition
Representative Gaydos argues that the inheritance tax constitutes a double taxation of assets. “You already pay taxes on this money that is yours, and then to add insult to injury, when you die, government then wants to tax that,” Gaydos stated. This sentiment is echoed by some Pennsylvanians who believe the tax discourages residents and former residents from returning to the state. Concerns have been raised that the tax prevents native Pennsylvanians from returning to their home state, fearing high tax rates on inherited wealth.
House Bill 1394: Progress and Support
Introduced on May 5, 2025, House Bill 1394 has garnered bipartisan support, with co-sponsors from both Republican and Democratic parties. The bill has progressed through the legislative process and currently resides in the House Finance Committee. Representative Gaydos initially introduced similar legislation in 2025, demonstrating a continued commitment to repealing the tax.
Looking Ahead
While the bill has gained momentum, its future remains uncertain. The potential economic impact of eliminating $1.7 billion in annual revenue will likely be a key point of debate. However, proponents argue that eliminating the tax could stimulate economic growth by encouraging investment and attracting residents back to Pennsylvania. The operate on this bill is expected to begin in 2028.
As of March 20, 2026, the bill is still under consideration, and the debate over Pennsylvania’s inheritance tax continues.