I would venture to say that you do not have to pay inheritance tax on what your father left you. Please consult an attorney for more specific information.

Lallygag yes Pennsylvania does have an inheritance tax. It would be a good idea to talk to an attorney practising in PA to make sure the amoumt you received is exempt. I know that proceeds of a life insurance policy is not taxed in PA but other amounts may be taxed. The percentage of tax depends on your relationship to the decedent.

For years 2011 and 2012 there is no federal estate tax on estates valued less than $5 million. For these 2 year the estate tax is coupled with the gift tax so you can give away up to 5 million in 2011 and 2012 and not owe any federal tax at death.

If you're inheriting money through 2012, the good news is that the Federal tax is up in the air and negligible. Federal inheritance taxes are only owed if you're inheriting a substantial estate valued at over five million.

Unfortunately, many states have their own inheritance tax laws. This means a certain percentage of your inheritance will go the state where the person leaving you inheritance lived. Pennsylvania has a graduated system based on relations between the deceased and the person inheriting the money. Folks are generally taxed less if the inheritance is coming from a parent, but more if the deceased is a sibling, aunt or uncle, distant family relation, or not blood related at all.

Other states vary enormously in their tax rates and how their systems are set up. If you're getting inheritance, the best thing to do is to settle tax issues as soon as possible, just to get them out of the way. If your tax isn't due until regular filing time early the next year, then keep track of what you owe and hire a tax preparer, or use an online service to file and pay.