Quick answer: life insurance, qualifying farmland kept in agricultural use, a $3,500 family exemption, and spousal joint tenancy all escape this tax, on top of the relationship-based rates in Rates & Who Pays.
Life insurance passes outside the tax
Family farms get a real, ongoing exemption
Farmland is exempt from inheritance tax as long as it's inherited by family members and continues to be used for agriculture for seven years, generating a yearly gross income of at least $2,000. This isn't a one-time carve-out — it's conditioned on the land actually staying in agricultural use for the full seven-year period after death.
A modest, single family exemption
Pennsylvania also allows a $3,500 family exemption under 20 Pa.C.S. §3121 — a single exemption, not one per beneficiary, available to qualifying family members subject to statutory priority and household requirements. It reduces the taxable estate overall rather than shielding each heir's individual share.
Spousal joint tenancy, with one catch
Property held jointly between spouses with right of survivorship is exempt under 72 P.S. §9111(m) and generally doesn't need to be reported. The one exception: if that co-ownership was created within one year before death without valuable and adequate consideration, the entire interest becomes a taxable transfer that must be reported — though the 0% spousal rate still applies to it.
A local probate attorney can review your estate — many offer a free consultation.
These exemptions still must be reported on a timely filed inheritance tax return (REV-1500), even when no tax is ultimately owed on the exempt property.