On November 21, 2025, the House of Delegates of the Pennsylvania Bar Association approved a joint recommendation of the Real Property, Probate and Trust Law and Elder Law Sections of the PBA to support HB 256, which will exempt from Pennsylvania inheritance tax all educational savings accounts (usually known as “529 accounts” or “529 plans”), regardless of whether the account was created under the laws of Pennsylvania or another state.

The complete Report and Recommendation of the two PBA sections explains the background of HB 256, which is that the Inheritance and Estate Tax Act does not include any exemption from inheritance tax for educational savings plans described in section 529 of the Internal Revenue Code. Pennsylvania has enacted its own plan for educational savings account to qualify under section 529, and that statute exempts accounts under that plan from all taxation, including inheritance tax. Because there is no general exemption for 529 plans, educational savings accounts created under the plans of other states remain subject to inheritance tax.

One Orphans’ Court judge has held that an inheritance tax exemption only for Pennsylvania 529 accounts violates the uniformity clause of the Pennsylvania Constitution. Calihan Estate, 2 Fid.Rep.4th 1, No. 0024 of 2021 (Allegheny O.C. 11/7/2023). However, the Pennsylvania Department of Revenue is not following that decision for estates in other counties.

HB 256 would amend the inheritance tax act to exempt from inheritance tax all 529 accounts, regardless of what state law was used to create the account, and the PBA now supports that legislation (or any similar legislation that might be proposed in the future).