“Well, yes my wife was a beneficiary.”---> In 2010, the estate tax is completely repealed, and in 2011 the estate tax law returns using 2001 rules. So, heirs of decedents who die during 2010 will have the choice between using the modified carryover basis rules or applying the retroactively reinstated estate tax. Since your spouse paid both Fed and PA state taxes on her portion of the taxable estate, as a full year resident of MA, your spouse can claim PA tax credit paid on the taxable estate to PA on her MA state return as long as the tax rate in MA is higher than that in PA. For example, assume that your spouse paid LTCG tax to PA on the taxable estate asset, then she can claim PA tax credit on her MA return in lieu of paying same LTCG tax to MA ALSO.
“ The amount is about $25K. I had a windfall last year so I'll be paying less tax this year and I've got to be careful about estimated taxes. So I'd like to understand if I need to pay estimated taxes on this amount. As I said the estate paid all the PA and Fed taxes already.”--->No; as said above since your spouse( also as you said) paid all the PA and Fed taxes already, you don’t need to pay (quarterly) estimated taxes to both Fed. Govt. and MA state on the amount, $25,000. You can claim PA tax credit on your MA state return.