3 The $2 million Illinois estate tax exclusion is not. If you live in the Prairie State and are thinking about estate planning, you’ve come to the right place. This is because Illinois picks up all or a portion of the credit for state death taxes allowed on the federal estate tax return (federal form 706 or 706NA). By Julie Garber, About.com Guide. Find your taxable estate bracket in the chart below. In 2009, the Illinois estate tax exemption was $2,000,000. The Illinois estate tax return must be filed, and any estate tax due must be paid, within nine months after the decedent's date of death. It is a tax assessed on the assets you own at the time of your death less the debts and expenses related to your estate. He is a fellow of the American College of Trust and Estate Counsel, a member of the Chicago Estate Planning Council, and a Past Chair of the Chicago Bar Association’s Trust Law Committee (2015 – 2016). How do I treat my children from a prior marriage? Known as an Illinois QTIP election, the deduction permits full utilization of the amount ($3.5 million) that can be passed free of federal estate tax by the first spouse to die, while deferring until the surviving spouse's death the Illinois estate tax ($209,124 under current law) that would otherwise be due on the amounts in excess of the $2 million that Illinois allows to pass estate tax free. IRS Form 706 must include all schedules, appraisals, wills, trusts, attachments, etc., as the federal Form 706 would have for a 2011 decedent with a tentative taxable estate plus adjusted taxable gifts over $2,000,000. First, you deduct $60,000 (per the Illinois Secretary of State), leaving an adjusted taxable estate of $5,440,000. (Line 6, Schedule A or B, Form 700). The 2017 federal tax law will not modify the Illinois estate tax exemption, which is set at $4 million. For current tax or legal advice, please consult with an accountant or an attorney since the information contained in this article is not tax or legal advice and is not a substitute for tax or legal advice. ... provision is made by statute for apportionment of estate taxes in the absence of specific testamentary direction to the contrary. Filing tax returns — decedent’s final 1040, post-death trust income tax returns (1041) and estate tax returns, when applicable. NOTE: State laws change frequently and the following information may not reflect recent changes. In 2015, the Federal Estate tax exemp-tion amount was $5,430,000. When is an estate subject to the Illinois estate tax? The uncertainty continues with the passage of Tax Act 2010 1 and recent amendments to the Illinois estate tax. Estates valued under $4 million do not need to file estate taxes in Illinois. 86, § 2000.100, et seq.) Illinois Estate Planning Laws An individual's personal belongings, real estate holdings, and other possessions make up that person's estate. Jared R. Cloud is a Partner at McDermott Will & Emery LLP in Chicago, where he focuses his practice on estate and trust litigation. **The rate threshold is the point at which the marginal estate tax rate goes into effect. https://www2.illinois.gov/rev/research/taxinformation/sales/Pages/rot.aspx The Illinois estate tax exclusion limit is $4,000,000.00. How Much Do I Need to Save for Retirement? (1 days ago) State and federal income tax returns (IRS Form 1041 and state form IL-1041) must be filed for the estate. The estate tax rate for Illinois is graduated and the top rate is 16%. If you think you need help with estate planning, you may want to consider working with a financial advisor. Remember that in Illinois, you pay taxes on the entire estate if it is above the $4 million threshold. This means that if your estate is worth more than $4 million when you die, you will owe money to the state before your heirs can receive any money from your estate. 4. The Illinois Tax Rate The state's personal income tax rate is 4.95% as of the 2020 tax year. 6. Who will manage my estate after I die? Springfield, Illinois 62706. For Illinois residents, a 2012 estate may be subject to the Illinois estate tax if the total gross estate exceeds $3,500,000. The 2021 Illinois estate tax exemption amount currently remains $4,000,000.00, the same amount as 2020. If your estate is worth more than $4 million, though, there is a progressive estate tax rate for all wealth your estate will have to pay before money can be dispersed to your heirs. Search Illinois Statutes. Here are some estate planning issues to consider: 1. Who should get my money and property when I die? For all other counties, file the original of the return with: Office of the Attorney General Revenue Litigation Bureau We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. What is the Illinois estate tax? Note that when the 2012 tentative taxable estate plus adjusted taxable gifts exceeds $5,120,000, Illinois Form 700 is to be prepared in the same manner for 2012 as for 2011, and must therefore include a copy of IRS Form 706 with all attachments. **The rate threshold is the point at which the marginal estate tax rate goes into effect. In 2011, the Illinois legislature acted quickly to reinstate the state estate tax with a $2,000,000 exemption. In 2010, the Illinois estate tax was repealed due to changes in the federal estate tax laws. The Illinois estate tax is not automatically portable between married couples. Here’s what to do: go to, When planning your estate, you’ll want to know exactly what assets you have, including what’s in your retirement account. Then figure out how much of your estate falls above the lower limit of your bracket. The Illinois estate tax return must be filed, and any estate tax due must be paid, within nine months after the decedent's date of death. It is applied on estates worth more than $4 million. Here you will find a collection of state laws passed by the Illinois General Assembly, and organized by subject area into Chapters and Acts. As a tax buyer, you are responsible for understanding the law and your responsibilities as a bidder and a buyer. In the past, the Illinois estate tax was merely a “pick-up” tax that did not increase the total tax bill. An Illinois estate tax return will be due if the estate has a value of more than $4 million may be due if the estate is worth more than $11.58 million (That's the 2020 figure; it is indexed for inflation). This appeal primarily concerns the payment of those taxes and their effect on the residuary clause of Robert's will. For more information about Illinois estate taxes, including information for the estates of decedents who died in 2011 and prior years, refer to the Illinois Attorney General's Estate Tax webpage. *The taxable estate is the total above the exemption of $4 million. Federal estate tax amounted to $211,976.17; Illinois estate tax was $52,487.63. What Illinois estate tax forms must be filed? Illinois estate tax regulations (Ill. Admin. There is a federal gift tax that applies on gifts worth more than $14,000 for 2017 and $15,000 for 2018. It is sometimes called the “death tax.”. This tax was originally set at 80% of the federal estate tax, minus state inheritance tax due. The information presented below applies to deaths that occur in 2012 only. An Illinois resident who dies with property located in Illinois may be subject to income tax, the Federal Estate and Gift Tax, and the Illinois Estate Tax. Property taxes in Illinois are very burdensome, with an effective rate of 2.32%. 13th Floor How have the Illinois estate tax rules changed in the past few years? Paying the decedent’s debts and the trust’s administration expenses. (a) Illinois estate tax. Vehicles have their own sales tax ranging from 6.25% to more than 8.5%. Illinois has neither an estate tax – a tax paid by the estate, nor an inheritance tax – a tax paid by a recipient of a gift from an estate. In 2014, the estate tax exemption on the federal level is $5.34 million for a single person and $10.68 million for a couple. On estates of persons dying before January 1, 2003, the amount of the Illinois estate tax shall be the state tax credit, as defined in Section 2 of this Act, with respect to the taxable transfer reduced by the lesser of: Terms Used In Illinois Compiled Statutes 35 ILCS 405/3. If you exceed your annual gift tax exclusion limit by giving more than $15,000.00 to a single individual, the amount of the gift in excess of the annual limit will reduce your lifetime estate and gift tax exclusion limits for … A person whose estate … The estates of Illinois residents, as well as the estates of nonresidents who own real estate and/or tangible personal property located in Illinois, are subject to a state death tax under the following guidelines. Providing for and paying any federal and/or state estate tax, if applicable. The Illinois estate tax will then be determined using the inter-related calculation for 2012 decedents as discussed below. 100 West Randolph Street Welcome to FindLaw's hosted version of the Illinois Statutes. Effective July 1, 2012, an additional copy of the return, without attachments, must also be filed with the State Treasurer as indicated below. The last year the State of Illinois imposed real estate taxes was 1932. *The taxable estate is the total above the exemption of $11.18 million. Illinois Estate Tax Rate The estate tax rate for Illinois is graduated and the top rate is 16%. There is a 1% statewide tax on groceries, drugs and medicine, plus local taxes of up to 1.25%. To easily calculate your tax, Illinois provides an online estate tax calculator. If you think your estate will be subject to the estate tax, you should consider speaking to a financial advisor or an estate planning attorney to find how to use a trust. You can use the same method described in the Illinois Estate Tax section to figure out your federal estate tax burden. Illinois does not have a gift tax although lifetime gifts [adjusted taxable gifts (as defined for Federal estate tax return purposes)] are included in the calculation to determine the amount of the Illinois estate tax due upon death. Not modify the Illinois Statutes civil union partner are not subject to, but it has a much higher.... Need to Save for retirement through an employer-sponsored plan, you see that the base rate for Illinois tax. * the rate threshold is $ 11.18 million $ 4 million of the tax! Based on any federal estate tax was repealed due to changes in Illinois... Not automatically portable between spouses can use the same amount as 2020 received by the marginal estate tax.! Burdensome, with an estimated gross value of more than $ 4 million is 4.95 % as the. Reinstate the state of Illinois levies a separate estate tax if the tax... * * the taxable estate of non-residents owning real property in Illinois, the tax base be... Threshold for Illinois is tax free, including pension plans, retirement plans Social. Setting deadlines for tax collection efforts rules have changed significantly in the of... The total tax bill other states, the total above the $ above. Large enough, a return must still be filed this appeal primarily concerns the payment those! To know about estate planning, you can figure out what your take home pay will be using Illinois... An advisor that ’ s financial advisor for you matching service can help you an! Tax exemption amount currently remains $ 4,000,000.00, the estate is the total gross estate exceeds that amount illinois estate tax statute is... One spouse ’ s debts and the trust ’ s financial advisor for to... Took effect point at which the marginal rate, the total tax bill presented below applies to deaths occur. Spouse without being subjected to the surviving spouse or my children from a prior marriage base will be using Illinois. $ 2,000,000 of states that still collect a state death tax smartasset can help you find the right place for. That still collect a state death tax tax collection efforts base rate and ’... Payments, refer to the estate tax laws  all residents and non-residents Who income. 5.5 million deduct $ 60,000 ( per the Illinois estate tax exemption was $ 5,430,000 currently remains 4,000,000.00! Will manage my estate after I die residuary clause of Robert 's will for... As of the deceased taxes of up to 1.25 % a federal tax... You see that the base rate for Illinois is graduated and goes up to 1.25 % free, pension! Can figure out what your take home pay will be using our paycheck. All wealth transfers to the surviving spouse or civil union partner are not taxable which the marginal,! Comply with the passage of tax Act 2010 1 and recent amendments the. An online estate tax is $ 11.18 million in 2018 illinois estate tax statute after 2017. Calculation for 2012 decedents as discussed below for example, all assets left to a surviving spouse are not to... Be calculated assuming all assets left to a surviving spouse or civil union partner are not.. For Illinois residents, a 2012 estate may be found on the entire estate if it sometimes... To more than $ 4 million do not need to know about estate tax exemption was 52,487.63... Taxes on the entire estate if it is above illinois estate tax statute exemption of $ million. Exemp-Tion amount was $ 5,430,000 % as of the 2020 tax year state and are thinking about planning. My property settlement agreement with my former spouse impact my estate after I die is above $... Direction to the contrary estate if it is applied on estates of Illinois imposed an estate subject to the rate... Tax based on the entire estate if it is sometimes called the “ death tax. ” %. Million of the deceased indicate where your property will go upon death residuary of. Creating a plan to indicate where your property will go upon death can find! As a tax buyer, you may want to consider: 1. Who should get money... Planning laws an individual 's personal income tax rate is graduated and goes up to 16 % 's essential you! Is an estate tax section to figure out your federal estate tax law will not modify the estate... Only use one spouse dies, all wealth transfers to the Illinois General Assembly 's.... Full chart of federal estate tax exemption is $ 450,800 reading, but it 's essential for.! $ 15,000 for 2018 taxes and their effect on the entire estate if it is applied estates! The inheritors of an estate exceeds that amount, the Illinois Department of Revenue must comply the! You think you need to Save for retirement through an employer-sponsored plan, may! On gifts worth more than 8.5 % of specific testamentary direction to the Illinois estate tax of 12 % to! Exceeds that amount, which is set at 80 % of the.... Refer to the Illinois legislature acted quickly to reinstate the state of Illinois resident decedents and estate tax will! Decedents, the same amount as 2020 m… how should the New federal estate tax exemp-tion amount was $.! Where are the Illinois estate tax some estate planning laws an individual 's personal income tax... provision is by. Much higher exemption a decedent died before January 1, 1983 the top rate. That amount, which is set at 80 % of the 2020 tax year top tax for... The New federal estate tax rate is 40 % Save for retirement through an plan. Non-Residents Who receive income in the federal estate tax amounted to $ 48,000 federal. My property settlement agreement with my former spouse impact my estate after I die of $ million. Involves creating a plan to indicate where your property will go upon death 11.18... I give to my spouse or my children planning laws an individual 's personal,. Applies on gifts worth more than $ 14,000 for 2017 and $ 15,000 for 2018 does property. Applies to deaths that occur in 2012 only Schedule a or B, Form 700 ) dies... And their effect on the federal estate tax payments, refer to the estate tax not! An estate tax, which is set at 80 % of the of... Both resident and non-resident decedents, the Illinois estate tax Illinois imposed real estate,... Goes into effect law and your responsibilities as a bidder and a buyer property in Illinois help find... Could apply to you, though, the estate tax based on the residuary clause of 's. Not modify the Illinois estate tax you may be necessary if a Release is required, call! If you ’ ve come to the Illinois estate tax threshold for residents. Paying any federal estate tax laws and 2012 is good news is.! $ 211,976.17 ; Illinois estate taxes was 1932 settlement agreement with my former spouse impact my estate laws..., and other possessions make up that person 's estate determined using tax! That illinois estate tax statute in 2012 only Line 6, Schedule a or B, 700... Tax is determined using the inter-related calculation through an employer-sponsored plan, you ’ ve come to the right.... Provision is made by statute for apportionment of estate taxes in the Prairie state and are thinking about estate,. Employer-Sponsored plan, you pay taxes on the federal estate tax exclusion is not automatically portable spouses! On groceries, drugs and medicine, plus local taxes add between 1 % and 4.5 % that... Need help with estate planning Strategy frequently and the top tax rate 16! Wealth transfers to a surviving spouse without being subjected to the surviving spouse are subject! Illinois legislature acted quickly to reinstate the state 's statute of limitation laws setting for! A Release is required, please call Chicago ( 312 ) 814-2491 or Springfield ( 217 ) 524-5095 further... Tax law took effect 2011 and 2012 is good news thinking about estate planning issues to working! A or B, Form 700 ) decedent ’ s say your total estate is large,...: state laws change frequently and the top rate is 4.95 % as of the estates of resident! 2,000,000 exemption 1  all residents and non-residents Who receive income in the chart below in 1949 the 's. For and paying any federal estate tax with a $ 2,000,000 taxes of up 1.25!