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Senate of Pennsylvania
Session of 2017 - 2018 Regular Session


Posted: July 25, 2017 09:34 AM
From: Senator Mike Folmer
To: All Senate members
Subject: Reintroduction of 0% Inheritance Tax for Disabled Child Beneficiaries
For many years, I have introduced legislation at the request of Winnie McHale to allow disabled children to inherit their parents’ property at a 0% tax rate. Regrettably, Winnie passed away last year. In her memory, I plan to reintroduce Senate Bill 623 from last Session.

Previous cosponsors were: Wozniak, Tomlinson, Greenleaf, Vogel, Williams, Schwank, Teplitz, Fontana, Ward, Scarnati, Mensch, Kitchen, Yaw, Yudichak, Aument, Blake, Hutchinson, White, Brewster, Vulakovich, Hughes, Alloway, Costa, Rafferty, Boscola, Tartaglione, Farnese, Baker, Dinniman, Smucker, Leach, Bartolotta, Browne, Brooks, Smith, Scavello, McGarrigle, and Argall.

Pennsylvania is one of only a handful of states that tax disabled children who inherit from their parents. The Pennsylvania Department of Revenue previously said it does not believe this proposed legislation violates the Uniformity Clause of Article VIII, Section 2(b) (ii) of the Pennsylvania Constitution by allowing the General Assembly to establish disabled individuals as a class "determined to be in need of tax exemption."

Under current Pennsylvania law, the transfer of property of a deceased spouse or a deceased minor child is taxed at a 0% rate. However, disabled children are taxed at the full inheritance tax rate. My legislation would provide for a 0% rate for a “disabled child” as determined by governmental agencies only (i.e., no self-nominated status).

The most compassionate and cost effective place to raise, care for, and educate a disabled child is in their parents’ homes with appropriate support. For some families with a disabled member, their estates may have only one major asset to pay inheritance taxes: the real estate where the child is living. When a home is sold in order to satisfy the inheritance tax, those children can become homeless. Such children must then turn to the social safety net for care, housing, and other support. This is the most expensive, long term choice for the care of a disabled child.

If the Commonwealth stops imposing a tax on estates inherited by disabled children, their real estate can remain as the home bases for disabled people for as long as it is needed and at a much lower cost to the Commonwealth’s social safety net. I believe this is a win-win for both disabled people and taxpayers.

I hope you will consider being a cosponsor of this legislation in Winnie McHale’s memory.

Thank you.

Introduced as SB861