Family · Estate tax
Does Illinois Have an Estate Tax?
Whether Illinois levies its own estate tax, the exemption threshold that decides if an estate owes anything, and what a surviving spouse inherits tax-free. Estate tax is separate from any inheritance tax. Cited to the statute.
How the estate tax works in Illinois
The exemption threshold, how the tax applies only to value above it, and the transfers the law leaves untaxed.
| How the tax works | What it means |
|---|---|
| The estate pays, above a $4,000,000 exclusion | Illinois taxes the estate itself, not the heirs. No tax is due unless the estate is worth more than $4,000,000. An estate over that figure files Form 700 with the Illinois Attorney General. |
| The exclusion is not indexed to inflation | The $4,000,000 figure has stood since 2013 and is not adjusted for inflation, so more estates cross the line over time. It is also not portable between spouses. |
| It works like a cliff, with rates up to 16% | Because the $4,000,000 is a threshold rather than a credit, an estate above it is taxed on a base that reflects the whole taxable estate, not just the amount over $4,000,000. The graduated rates reach 16% at the top. |
| What is exempt | What it means |
|---|---|
| Unlimited marital deduction | Property that passes to a surviving spouse is fully deductible, so a transfer to a spouse is not taxed no matter its size. Tax may apply later when that spouse dies. |
| Charitable transfers | Gifts to qualifying charities are deducted from the taxable estate. Amounts left to charity are not counted when the estate is measured against the $4,000,000 exclusion. |
| Qualified farm property | A larger exclusion of $6,000,000, adjusted for inflation, is available for qualified farm property that meets the statute’s tests, recognizing that farmland can be worth a great deal on paper. |
What you can do right now
Concrete, neutral steps if an estate in Illinois may be near the threshold. This is general information, not tax or legal advice.
- Add up the gross estate
Total the value of everything the person owned at death, including real estate, accounts, and life insurance they controlled, plus adjusted taxable gifts. If the total is over $4,000,000, an Illinois return is likely required.
- File Form 700 with the Attorney General
The Illinois estate tax return is Form 700, filed with the Illinois Attorney General, not the Department of Revenue. It is generally due within nine months of the death.
- Apply the marital, charitable, and farm deductions
Subtract transfers to a surviving spouse and to charity, and check whether the qualified farm-property exclusion applies, before figuring the tax.
- Plan around the cliff for estates near $4,000,000
Because the exclusion is not indexed and is not portable, married couples with combined assets over $4,000,000 often plan ahead. Confirm the numbers with the Attorney General’s estate tax office or an estate attorney.
Estate tax turns on the total value of the estate and the current exemption. The state department of revenue publishes the return and the threshold in effect for the year of death.
→ Illinois Attorney General: Estate TaxThis is general information, not tax or legal advice. Thresholds change and large estates have planning options, so confirm the current figure against the statute or with the state revenue office.
What people in Illinois get wrong about estate tax
Illinois levies a state estate tax that the estate pays before assets pass to heirs. It applies once the estate is worth more than $4,000,000. That figure has stood since 2013, it is not adjusted for inflation, and it is not portable between spouses, so more estates cross the line over time and married couples often plan around it. Illinois treats the $4,000,000 as a threshold rather than a dollar-for-dollar credit, which gives it a cliff effect: an estate above the line is taxed on a base that reflects the whole taxable estate, not just the amount over $4,000,000. The graduated rates reach 16% at the top. Transfers to a surviving spouse are fully deductible, gifts to charity are deducted, and qualified farm property gets a larger $6,000,000 exclusion. The return is Form 700, filed with the Illinois Attorney General rather than the Department of Revenue. This is an estate tax, paid by the estate, not an inheritance tax paid by an heir. Illinois has no inheritance tax.
Common questions
Does Illinois have an estate tax?
Yes. Illinois levies a state estate tax under 35 ILCS 405. The estate pays it, and it applies once the estate is worth more than $4,000,000.
What is the estate tax exemption in Illinois?
The exclusion is $4,000,000. It has not been adjusted for inflation since 2013 and is not portable between spouses. Estates worth less than that owe no Illinois estate tax.
Does the whole estate get taxed if it goes over $4,000,000?
Effectively, yes. The $4,000,000 works as a threshold rather than a credit, so an estate above it is taxed on a base tied to the whole taxable estate, with rates up to 16%. This cliff is why planning matters near the line.
Where is the Illinois estate tax return filed?
The return is Form 700, filed with the Illinois Attorney General, not the Department of Revenue. It is generally due within nine months of the death.
Is Illinois estate tax the same as inheritance tax?
No. The estate tax is paid by the estate before assets pass, and only when the estate is over $4,000,000. An inheritance tax is paid by the heir. Illinois has no inheritance tax.
Not legal advicePlainStatute provides plain-language summaries of public law for general information only. This is not legal advice. Statutes change; always confirm current requirements with the official source linked above before acting.