When You Die, Why Does PA Treat Your Spouse as if She Receives Income When the Name on Your IRA Changes to Her

Question

... name?

When you die, Pennsylvania treats the money that you leave to your spouse in an IRA as INCOME when she files for a property tax rebate.

The amazing thing is that the state once again treats that same money as income when she makes actual withdrawals.

So, the state penalizes your spouse TWICE --- once when the IRA is changed from your name to her name and once again when your spouse actually receives cash from the IRA.

Answer 1

This doesn't sound right, have you checked with a tax professional to see if this is actually what is happening? Check with 2 or 3 to see if you get the same answer from all of them.

Answer 2

Deductions are a matter of legislative grace. Contact your state legislator and complain about this inequity.

Answer 3

Because that's the law there. If you want to see it changed, contact your elected representatives. They work for you, make them do their jobs!