PA Senate To Consider Inheritance Tax Cut, Deductions For Organ Donors

By Ian Karbal | Pennsylvania Capital-Star

Two bills that would cut taxes for Pennsylvanians in two very different circumstances advanced through a state Senate panel last Wednesday. 

One would allow living organ donors to deduct costs related to their donation.

While employers across the state are allowed to claim tax deductions for time off offered to living organ donors, donors themselves receive no such benefits.

That would change if lawmakers pass a bill sponsored by Sens. Lindsey Williams (D-Allegheny) and Lynda Schlegel Culver (R-Northumberland), who testified to members of the Senate Finance Committee almost five years to the date after receiving her sister’s kidney.

She told senators she spent three years on an organ transplant waiting list. 

“I’ve seen firsthand the gift of donation and what it means,” Culver told lawmakers. “It has allowed me and so many others the opportunity to have a full life.”

According to the University of Pennsylvania Health System, more than 6,000 Pennsylvanians were on the transplant waiting list in 2025.

Culver and Williams’ proposal would allow living organ donors to deduct up to $10,000 in unreimbursed expenses related to the donation from their taxable income. That would include costs like travel, lodging, lost wages and medical expenses.

According to Culver, studies show the average living organ donor faces roughly $5,000 in expenses, which includes things like travel, lost wages and child care during recovery.

“If only a tiny percent of adults find it a little easier to become a living donor, we could eliminate our transplant waiting list entirely,” Williams said.

The measure was passed unanimously by members of the Senate Finance Committee.

The other bill passed unanimously by the committee would allow Pennsylvanians to exempt the first $100,000 that would be subject to the state’s inheritance tax.

Pennsylvania is one of five states that has an inheritance tax. Twelve states and Washington, D.C. have an estate tax, which is similar in premise, but is levied before any assets are passed down.

Pennsylvania’s tax is paid by the ones who receive money or assets, and rates can be as high as 15%.Inheritance is taxed at 4.5% from parents or grandparents, 12% from siblings, and 15% from more distant relatives or non-relatives. 

There are existing exemptions for family farms and businesses that can be passed down untaxed if heirs continue to work them.

Sen. Michele Brooks (R-Mercer), who sponsored the measure, has put forward bills in the past that would have eliminated the levy entirely. But with none of those passing, she told lawmakers the current proposal was a means of chipping away at it.

Sen. Greg Rothman (R-Cumberland), who supported the measure, said  it would primarily help low- and middle-income people who may not be able to afford to pay a tax on, for example, a family home inherited from a deceased parent or sibling.

“To be clear, people who have $15 million in assets go hire lawyers and accountants and set up trusts,” he said. “They never pay any inheritance tax anyway.”

Sen. Art Haywood (D-Montgomery) also voted in favor of the bill, calling the state’s tax system “regressive.” But he warned that continuing to cut taxes without raising revenue elsewhere will contribute to the state’s deficit.

“The general assembly has spent quite a bit of probably two decades or more on reducing revenue into the commonwealth,” he said. “Then we have these significant gaps in terms of funding public education, public health, roads and bridges.”

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