Illinois Inheritance Tax

Inheritance tax is a tax imposed on the privilege of receiving property by inheritance or legal succession and assessed on the value of the property received. Illinois inheritance tax no longer exists. There is, however, an estate tax applicable in Illinois. The rules and regulations of this tax are supervised by the Illinois Department of Revenue.
In the state of Illinois, a separate estate tax is imposed on the estates of deceased persons who had been residing in Illinois, as well as real properties of people who are possessing estates, but are not residents of the state. To pay federal estate tax in Illinois, it is mandatory to file a United States estate tax return if the gross value is more than $2,000,000.

Effective since January 1st, 2003, the state of Illinois has levied a stand-alone estate tax, which though different, is implemented side by side along with the Federal estate tax. For persons dying in 2009, the Federal exemption for Federal estate tax purposes is $3,500,000.

However, the exemption equivalent for Illinois estate tax purposes is $2,000,000. Therefore, tentative taxable estates with adjusted taxable gifts between $2,000,000 and $3,500,000 will owe an Illinois estate tax without any corresponding Federal estate tax liability.
In such situations, the estate representative is to prepare and file the Illinois Estate Tax Return, Form 700, together with a Federal Form 706, Federal Estate Tax Return, or any other form containing the same information, even though the Federal return is not required to be filed with the Internal Revenue Service.

The Federal Form 706 must include all schedules, appraisals, wills, trusts, attachments, etc. as the Federal Form 706 would have for a 2008 decedent with a tentative taxable estate plus adjusted taxable gifts over $2,000,000. TheIllinois estate tax will be determined using the inter-related calculation for 2009 decedents. When the tentative taxable estate plus adjusted taxable gifts exceeds $3,500,000 the Illinois Estate Tax return, Form 700, is to be prepared in the same manner for 2009 as for 2008, and must therefore include a copy of the Federal Form 706 with all attachments.

The percentage of Illinois assets to total assets is then computed with the percentage applied to the tax base for apportionment purposes to determine the amount of Illinois estate tax due. The Illinois inheritance tax may not offer the advantages of GARS/JRS (Jesuit Refugee Service). An estate tax is levied if the value of the taxable estate is more than the permissible requirements for the filing of estate tax returns.

The following table give information on federal exemption and estate tax rates for U.S. taxpayers subject to the estate tax:

Year Exclusion Amount Maximum /Top tax rate
2001 $675,000.00 55.00%
2002 $1 million 50.00%
2003 $1 million 49.00%
2004 $1.5 million 48.00%
2005 $1.5 million 47.00%
2006 $2 million 46.00%
2007 $2 million 0.45
2008 $2 million 0.45
2009 $3.5 million 0.45
2010 Repealed 0
2011 $5 million 0.35
2012 $5.12 million 0.35
2013 $5.25 million 0.4
2014 $5.34 million 40.00%
2015 $5.43million 40.00%


The tax amount is equal to the allowable amount of state death taxes credit, and is subject to the rules and regulations of the Federal Estate Tax. The form for filing estate tax return in Illinois is known as form 700. The Illinois estate tax is administered by the Attorney General of Illinois. The form has to be filed with the Attorney General and County Treasurer’s office.

Contact Details:
Illinois Department of Revenue
Willard Ice Building
101 West Jefferson Street
Springfield, Illinois 62702
Or: 1(217)782-3336

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