Estate & Trust Accounting
Serving as an executor means taking on filings and deadlines most people meet once in a lifetime. This page explains what Pennsylvania and the IRS actually require, in the order you will meet them.
Start here
Pennsylvania taxes an estate twice, in two different ways
Almost every executor we meet has these two confused, and the confusion is understandable: they are both called estate taxes, they are both filed in Pennsylvania, and they have similar-looking form numbers. They tax completely different things.
| REV-1500 | PA-41 | |
|---|---|---|
| What it taxes | The transfer of assets to beneficiaries | The income the estate earns while it is open |
| When it applies | Essentially every estate with PA assets | Only if the estate receives taxable income or incurs a loss |
| Who pays the rate | Set by the beneficiary's relationship to the decedent | Flat 3.07%, the same PA income tax rate as individuals |
| Deadline | 9 months from the date of death | Same schedule as the federal Form 1041 |
| Filed with | Register of Wills, in duplicate, in the decedent's county | PA Department of Revenue |
An example. Your father dies in February owning a house and a savings account. Both pass to you: that transfer is what REV-1500 taxes. Before the house sells in October, the savings account earns $900 of interest. That $900 is estate income, and it is what PA-41 and Form 1041 tax. Two filings, not one, and they are not interchangeable.
One more that catches people: an inheritance is not taxable income for Pennsylvania personal income tax purposes. What you receive as a beneficiary does not go on your PA-40.
Sources: PA Department of Revenue, Inheritance Tax & Safe Deposit Boxes FAQ (REV-584); PA Personal Income Tax Guide, Estates, Trusts and Decedents. Checked 26 July 2026.
The rate table
The rate depends on who inherits, not how much
This is the part that surprises families most. Pennsylvania does not tax estates on a sliding scale by size. It sets the rate by the relationship between the person who died and the person inheriting.
| Who inherits | Rate |
|---|---|
| A surviving spouse | 0% |
| A parent, from a child aged 21 or younger | 0% |
| A child aged 21 or younger, from a parent | 0% |
| Direct descendants and lineal heirs (children, grandchildren, parents, grandparents) | 4.5% |
| Siblings | 12% |
| Everyone else (nieces, nephews, friends, unmarried partners) | 15% |
| Charities, exempt institutions, government entities | Exempt |
“Lineal heirs” is broader than people assume. It includes stepchildren and adopted children, and it includes natural children even if they were later adopted by someone else. “Everyone else” is where the 15% bites: leaving property to a niece, a nephew or a long-term partner is taxed at more than three times the rate that applies to a child.
Source: PA Department of Revenue, REV-584. Rates shown apply to decedents dying on or after 1 July 2000 and are current as at 26 July 2026. Rates and thresholds change; confirm before relying on them.
The federal side
What the IRS wants, and what it usually does not
Form 1041, the estate's income tax return
The estate becomes its own taxpayer the day the decedent dies. The fiduciary must file Form 1041 for a domestic estate that has gross income of $600 or more for the tax year, or a beneficiary who is a nonresident alien. Note the second test carefully: it has no dollar figure attached. An estate that earned nothing at all still has a filing requirement if one beneficiary lives abroad and is not a U.S. person.
Trusts are held to a stricter standard than estates. A domestic trust must file if it has any taxable income at all, not $600, any, or gross income of $600 or more, or a nonresident alien beneficiary. Executors who apply the estate rule to a trust file late.
For a calendar-year estate the return is due 15 April. Form 7004 buys an automatic five-and-a-half month extension to file, though not to pay. An estate is entitled to a $600 personal exemption.
Form 706, the federal estate tax return
This is the one people fear and the one that almost never applies. For deaths in 2026 the basic exclusion is $15,000,000, so the overwhelming majority of Delaware County estates owe nothing and file nothing. The exception worth knowing: a surviving spouse can carry over the unused exclusion, but only by filing a timely return. If that could ever matter, raise it early.
Sources: IRS, Instructions for Form 1041, Who Must File; IRS, What's new: Estate and gift tax (basic exclusion table). Checked 26 July 2026.
What we handle
The work, start to finish
Every estate is different. The sequence rarely is.
Inheritance tax return
REV-1500 prepared and filed with the Register of Wills in the decedent's county, with the rate applied correctly for each class of beneficiary and every allowable deduction taken.
Estate and trust income tax
Federal Form 1041 and Pennsylvania PA-41 for every year the administration continues, with Schedule K-1s to beneficiaries.
Executor guidance
The EIN, the estate account, the date-of-death valuations, and a filing calendar so you know what is due and when.
Fiduciary accounting
Records of receipts, disbursements and distributions in the form the court and the beneficiaries expect.
Attorney and bank liaison
We speak to counsel and the financial institutions directly, so you are not relaying messages between professionals.
Cross-border estates
Non-resident decedents, overseas beneficiaries, and foreign trust reporting on Forms 3520 and 3520-A. Handled here, not referred out.
Frequently asked questions
Executor questions we answer most
Three things, in this order. Get an EIN for the estate, because the estate is a new taxpayer and cannot use the decedent's Social Security number. Open an estate bank account so estate money never mixes with yours. Then work out the date-of-death value of everything the decedent owned, because that number drives both the inheritance tax return and the beneficiaries' future capital gains. Most of the mistakes we are called in to fix trace back to one of those three being skipped.
Usually yes, and this is the most common surprise. Pennsylvania inheritance tax has no exemption threshold the way the federal estate tax does. A $60,000 estate passing to a niece is taxed on the same basis as a $6 million one. Separately, the federal income tax return for the estate, Form 1041, is required if the estate takes in $600 or more of gross income, or if any beneficiary is a nonresident alien, regardless of income.
By who inherits, not by how much. Pennsylvania sets the rate from the beneficiary's relationship to the decedent: 0% to a spouse, 4.5% to children and other lineal heirs, 12% to siblings, 15% to everyone else. Two people can inherit the identical amount from the identical estate and pay different tax.
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