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Illinois Estate Tax: What North Shore Families Should Know
Yes. Illinois has its own estate tax, separate from the federal estate tax. The exclusion amount for Illinois estate tax purposes is $4,000,000. If an estate’s gross value exceeds $4,000,000 after adjusted taxable gifts are added, an Illinois Form 700 must be filed, whether or not the IRS requires a federal return.
Key takeaways
- Illinois taxes estates over $4,000,000, whether or not federal estate tax applies.
- The federal basic exclusion amount for 2026 deaths is $15,000,000.
- Federal portability does not carry over to the Illinois estate tax.
- Illinois estate tax is due nine months after the date of death.
- Cook County estates file Form 700 with the Illinois Attorney General.
Most people assume that if they won’t owe federal estate tax, they won’t owe any estate tax, and in Illinois that assumption is where the trouble starts. The federal number is high enough that most families stop thinking about it after one conversation with an accountant. Illinois never moved its number to match.
On this page
- Does Illinois have an estate tax?
- The $4 million Illinois exclusion, and why it matters on the North Shore
- Illinois estate tax vs. federal estate tax
- What does the Illinois estate tax actually cost?
- Is the Illinois exemption portable between spouses?
- When and where an Illinois estate tax return gets filed
- Frequently asked questions
Does Illinois have an estate tax?
Yes. Illinois collects its own estate tax, and it runs separately from the federal one. The tax comes from the Illinois Estate and Generation-Skipping Transfer Tax Act, at 35 ILCS 405.
The Illinois Attorney General administers the Illinois estate tax, and all tax, interest and penalties are paid directly to the Illinois State Treasurer. That catches people off guard. No courthouse, no county clerk window.
You may also hear the phrase “death tax” at a kitchen table in Northbrook or Glencoe. It gets used for two different things, and the FAQ below pulls them apart.
The $4 million Illinois exclusion, and why it matters on the North Shore
The exclusion amount for Illinois estate tax purposes is $4,000,000, and it is a taxable threshold, not a credit against tax. Under 35 ILCS 405/2, that amount applies to persons dying on or after January 1, 2013. An exclusion amount is the value an estate can reach before the tax applies at all.
The filing rule uses the same number. If an estate’s gross value exceeds $4,000,000 after inclusion of adjusted taxable gifts, an Illinois Form 700 must be filed, whether or not a federal return is required by the IRS. Gross value means what a person owned before the estate subtracts anything. It is where the math starts.
Here is why that lands differently between Evanston and Winnetka than it does downstate. A house paid off years ago. A retirement account built over a thirty-year career. Maybe a condo somewhere warm. None of that is exotic, and together it reaches $4,000,000 faster than most people would guess.
Families in Wilmette and Skokie run into this without ever having thought of themselves as wealthy. The plan they signed a decade ago was built around the federal exemption. Illinois stayed put.
Illinois estate tax vs. federal estate tax
The two taxes borrow each other’s vocabulary and agree on very little.
| Feature | Illinois estate tax | Federal estate tax |
|---|---|---|
| Exclusion amount | $4,000,000 | $15,000,000 for a 2026 year of death |
| Administered by | Illinois Attorney General | IRS |
| Return | Form 700 | Form 706 |
| Portability between spouses | Not available for the Illinois computation | Available by election on a timely filed federal return since January 1, 2011 |
The federal basic exclusion amount for a 2026 year of death is $15,000,000, and since January 1, 2011 a surviving spouse may receive the decedent’s unused federal exclusion by election on a timely filed federal estate tax return. The distance between $4,000,000 and $15,000,000 is where families get caught.
An estate can sit well under the federal exclusion and still owe Illinois. Around here that happens all the time.
What does the Illinois estate tax actually cost?
The Illinois Attorney General publishes a worked example. A decedent with an estate of $5,000,000, all of it Illinois property, owes $285,714 in Illinois estate tax and $0 in federal estate tax.
The federal government takes nothing from that estate. Illinois takes $285,714.
The estate in the example sits $1,000,000 above the Illinois threshold. There is no business sale behind it, no inheritance windfall. Most families find out about the number after a death, when the person who could have planned around it is gone.
If your estate is anywhere near the $4 million line, it is worth knowing the number before your family has to.
Is the Illinois exemption portable between spouses?
Portability is the federal rule that lets a surviving spouse pick up whatever exclusion the first spouse did not use. Married couples have leaned on it for years. It does not do that work in Illinois.
A couple can assume the unused half simply carries over and plan on that basis. In Illinois it does not carry over, and the bill shows up at the second death.
The marital deduction, which lets property pass to a surviving spouse without estate tax at the first death, does not fix this either. Putting tax off is different from removing it. This is the part that needs Illinois-specific drafting, and it sits at the center of Illinois estate planning services for households with real assets.
The Illinois QTIP election
Illinois gives married couples a separate tool. For persons dying January 1, 2009 and after, the estate may make a QTIP election for Illinois purposes in addition to any federal QTIP election, on a timely filed Illinois return. Under 35 ILCS 405/2(b-1), the Illinois election is separate and independent of the federal one.
A QTIP election, short for qualified terminable interest property, is a choice the estate makes about how property set aside for a surviving spouse gets treated for estate tax purposes. The word doing the work is separate. Illinois lets the estate decide for Illinois without being tied to the federal answer.
That only helps if the return goes in on time and the documents were drafted to allow it. Most of that groundwork happens years earlier, when a couple sets up a revocable living trust or updates one they already have.
When and where an Illinois estate tax return gets filed
What follows is an overview of the main steps, not a complete filing procedure.
- The Illinois estate tax is due nine months after the date of death. Nine months feels like plenty in the first month and very little by the sixth.
- Extensions are available on application to the Attorney General using Form 700-EXT, and federal extensions are also recognized.
- For Cook, DuPage, Lake and McHenry Counties, the original Form 700 with a copy of the federal return is filed at the Office of the Illinois Attorney General, Revenue Litigation Bureau – Estate Tax Section, 115 S. LaSalle St., Chicago, Illinois 60603. An Evanston estate is a Cook County estate, so that is the address.
- All tax, interest and penalties are paid directly to the Illinois State Treasurer, not to the Attorney General who administers the tax.
Who handles the filing depends on how the estate was set up, and trustee and executor duties differ in Illinois in ways that decide who signs what. If the assets were held in trust, this work sits inside the larger job of settling a trust after a death.
One note for older matters: an Illinois Inheritance Tax Release may be necessary if a decedent died before January 1, 1983.
Frequently asked questions
- What is the Illinois estate tax exemption?
-
The exclusion amount for Illinois estate tax purposes is $4,000,000. It works as a taxable threshold rather than a credit against tax. Under 35 ILCS 405/2, that amount applies to persons dying on or after January 1, 2013.
- Does Illinois have an inheritance tax?
-
People say "Illinois death tax" loosely, but the tax the state administers today is the Illinois estate tax, overseen by the Illinois Attorney General. An Illinois Inheritance Tax Release may still be necessary if a decedent died before January 1, 1983.
- Is the Illinois estate tax exemption portable between spouses?
-
No. The portability and carry-over of the unused federal exemption to the surviving spouse is inapplicable to the computation and assessment of the Illinois estate tax. Married couples look instead to the Illinois QTIP election, made on a timely filed Illinois return.
- Where do Cook County families file an Illinois estate tax return?
-
For Cook, DuPage, Lake and McHenry Counties, the original Form 700 with a copy of the federal return is filed at the Office of the Illinois Attorney General, Revenue Litigation Bureau – Estate Tax Section, 115 S. LaSalle St., Chicago, Illinois 60603.
- When is an Illinois estate tax return due?
-
The Illinois estate tax is due nine months after the date of death. Extensions are available on application to the Attorney General using Form 700-EXT, and federal extensions are also recognized.
- Do Evanston and North Shore families really hit the $4 million threshold?
-
Some do. Illinois measures the gross value of an estate, which means a home is one part of the picture rather than the whole of it. Families who never considered themselves wealthy reach the threshold more often than they expect.
Illinois estate tax can affect families even when the federal estate tax does not. Daci Jett Law helps Evanston and North Shore families plan ahead with clarity.
