The state inheritance tax must be paid by the estate within nine months of death to avoid a penalty, according to the Pennsylvania Bar Association.

To the extent that the inheritance tax is paid within three months after the date of death, a discount of 5 percent is given.

The inheritance tax rates in effect based on the recent changes to the Pennsylvania Inheritance Tax Act are effective for dates of death on or after July 1, 2000, and are:

• The tax rate for transfers to a grandfather, grandmother, father, mother, child, lineal descendant or their spouse is 4.5 percent.

• The tax rate for transfers to a spouse is zero percent.

• The tax rate for transfers from a child age 21 or younger to a natural parent, an adoptive parent or a stepparent is also at the zero percent tax rate.

• The tax rate for transfers from a decedent to a sibling has been lowered to 12 percent. The Inheritance Tax Act defines a sibling as “an individual who has at least one parent in common with the decedent, whether by birth or adoption.” This includes a sibling by birth, a stepsibling by birth as well as a sibling by adoption.

• The tax rate for transfers to all other collateral beneficiaries (nephews, nieces, aunts, uncles, cousins, other relatives, friends, etc.) continues to be 15 percent.

• Gifts to charities or government entities continue to be deductible from the estate.