Illinois Estate Tax Calculator (2026)
Illinois runs its own estate tax, completely separate from the federal one, with a $4 million exemption that hasn't moved in over a decade and isn't shared between spouses. Enter your total taxable estate below to see whether you're over the threshold and get an estimate of what Illinois would charge, using the state's own official rate table.
| Item | Amount |
|---|
What the Illinois Estate Tax Is
Illinois imposes its own estate tax on the transfer of a deceased resident's assets, entirely separate from the federal estate tax administered by the IRS. It's collected by the Illinois Attorney General's office, not the Department of Revenue, and it's paid by the estate itself before any assets are distributed to heirs — so beneficiaries never see a separate state tax bill on what they inherit.
- $4,000,000 exemption per person for both 2025 and 2026, unchanged for years
- Not indexed for inflation and not portable between spouses
- Once the estate exceeds $4 million, the entire value is taxed, not just the excess
- Graduated rates from 0.8% to 16%, based on the old federal state death tax credit table
- Administered by the Illinois Attorney General, filed on Form 700, due 9 months after death
- Separate from — and in addition to — any federal estate tax that may also apply
The $4 Million Cliff Explained
Most graduated taxes, like income tax, are marginal: crossing into a higher bracket only taxes the additional income at the higher rate. Illinois estate tax doesn't work that way. The $4 million figure is an exclusion threshold, not a bracket start — if your estate is under it, you owe nothing at all; if it's over, the tax is calculated on the entire taxable estate from dollar one, using the graduated table below.
An estate worth $3,999,999 owes $0 in Illinois estate tax. An estate worth $4,100,000 — just $100,001 more — can owe roughly $100,000 in tax, because the tax applies to the full $4.1 million, not just the sliver above the threshold. The effective rate on that last $100,000 of value can approach 100%.
This is exactly why many advisors recommend getting an estate just under the line where possible, through lifetime gifting or trust planning, rather than treating $4 million as a soft target.
Illinois Estate Tax Rate Table
Illinois computes tax using the graduated rate table that was part of the federal state death tax credit under IRC Section 2011, frozen as it existed on December 31, 2001. The table applies to the "adjusted taxable estate," which is your taxable estate reduced by $60,000:
| Adjusted Taxable Estate | Base Tax | Rate on Excess |
|---|---|---|
| $0 – $40,000 | $0 | 0.0% |
| $40,000 – $90,000 | $0 | 0.8% |
| $90,000 – $140,000 | $400 | 1.6% |
| $140,000 – $240,000 | $1,200 | 2.4% |
| $240,000 – $440,000 | $3,600 | 3.2% |
| $440,000 – $640,000 | $10,000 | 4.0% |
| $640,000 – $840,000 | $18,000 | 4.8% |
| $840,000 – $1,040,000 | $27,600 | 5.6% |
| $1,040,000 – $1,540,000 | $38,800 | 6.4% |
| $1,540,000 – $2,040,000 | $70,800 | 7.2% |
| $2,040,000 – $2,540,000 | $106,800 | 8.0% |
| $2,540,000 – $3,040,000 | $146,800 | 8.8% |
| $3,040,000 – $3,540,000 | $190,800 | 9.6% |
| $3,540,000 – $4,040,000 | $238,800 | 10.4% |
| $4,040,000 – $5,040,000 | $290,800 | 11.2% |
| $5,040,000 – $6,040,000 | $402,800 | 12.0% |
| $6,040,000 – $7,040,000 | $522,800 | 12.8% |
| $7,040,000 – $8,040,000 | $650,800 | 13.6% |
| $8,040,000 – $9,040,000 | $786,800 | 14.4% |
| $9,040,000 – $10,040,000 | $930,800 | 15.2% |
| Over $10,040,000 | $1,082,800 | 16.0% |
Source: Illinois Attorney General's official State Death Tax Credit Table, 21 brackets total. This same table applies to every estate over the $4 million exemption regardless of size — a $4.1 million estate and a $40 million estate both run through this exact schedule.
How the Calculation Works
- Step 1: Determine your total taxable estate — essentially everything you own, including home equity, retirement accounts, life insurance proceeds, investments, and business interests.
- Step 2: Add any reportable lifetime taxable gifts made above the annual exclusion, since Illinois counts these toward the $4 million threshold test even though Illinois has no separate gift tax of its own.
- Step 3: If the total is under $4,000,000, no Illinois estate tax is owed — stop here.
- Step 4: If it's over $4,000,000, calculate the "adjusted taxable estate" by subtracting $60,000 from the taxable estate value.
- Step 5: Look up that adjusted amount in the rate table above and apply the base tax plus the marginal rate on the excess.
For estates large enough to also require a federal estate tax return (above the $15 million federal exemption in 2026), Illinois uses an additional "interrelated calculation" because the state tax paid is itself deductible on the federal return, creating circular math. The Illinois Attorney General provides an official online calculator to resolve this. For estates below the federal threshold — the vast majority of Illinois estates that owe state tax — the table above applies directly.
Worked Examples
A single Peoria retiree has a taxable estate of $3,800,000. Since this is under the $4,000,000 exemption, Illinois estate tax owed is $0 — regardless of how the rate table works.
A Naperville business owner has a taxable estate of $4,100,000. Adjusted taxable estate = $4,100,000 − $60,000 = $4,040,000, which falls in the $4,040,000–$5,040,000 bracket: $290,800 base tax, since the amount is right at the bracket start. The estate owes roughly $290,800 in Illinois estate tax — on an estate that would have owed $0 at just over $4 million if it had come in under the threshold instead.
A Chicago couple's combined estate (without trust planning) is $8,000,000 at the second spouse's death. Adjusted taxable estate = $8,000,000 − $60,000 = $7,940,000, landing in the $7,040,000–$8,040,000 bracket: $650,800 + 13.6% × ($7,940,000 − $7,040,000) = $650,800 + $122,400 = $773,200 estimated Illinois estate tax. With a credit shelter trust preserving both spouses' $4 million exemptions, this bill could potentially be eliminated or substantially reduced.
Illinois vs. Federal Estate Tax
| Illinois Estate Tax | Federal Estate Tax | |
|---|---|---|
| 2026 exemption | $4,000,000 per person | $15,000,000 per person |
| Indexed for inflation | No | Yes |
| Portable between spouses | No | Yes, with an election |
| Top rate | 16% | 40% |
| Cliff on exceeding exemption | Yes — full estate taxed | No — only excess taxed |
| Administered by | Illinois Attorney General | IRS (Form 706) |
Because Illinois's threshold is so much lower than the federal one, many Illinois families owe state estate tax while owing nothing at all to the IRS. Clearing the federal bar tells you nothing about whether Illinois tax is due — the two returns and calculations are entirely independent of each other.
Why Portability Matters
At the federal level, if one spouse dies without using their full exemption, the survivor can elect "portability" to add the unused amount to their own exemption. Illinois offers no such option — each spouse's $4 million exemption is strictly "use it or lose it." If everything passes outright to a surviving spouse when the first spouse dies (common under a simple will), that first spouse's $4 million exemption disappears entirely, leaving the couple with only one $4 million exemption combined instead of two.
The standard fix is a credit shelter trust (also called a bypass trust), funded with up to $4 million at the first spouse's death. The surviving spouse can still benefit from the trust's income and, often, its principal, but the assets sit outside the survivor's own taxable estate — effectively preserving both exemptions and shielding up to $8 million total for a married couple.
What Counts Toward Your Estate
- Real estate equity, including a primary home, vacation property, and rental property, at fair market value minus any mortgage.
- Retirement accounts, including 401(k)s, traditional and Roth IRAs, and pensions, at their full value.
- Life insurance proceeds, if the decedent owned the policy — this surprises many families, since the payout itself is usually income-tax-free but is still counted for estate tax purposes.
- Investment and bank accounts, business interests, and personal property such as vehicles, art, and collectibles.
- Reportable lifetime gifts above the federal annual exclusion, which Illinois adds back in when testing whether the $4 million threshold is crossed.
Many Illinois families are surprised to learn they're near or over the $4 million line once home equity, retirement savings, and life insurance are all added together — it doesn't take a business or a fortune to get there in a higher-cost area.
Filing Requirements (Form 700)
- Who files: The executor or personal representative of any estate whose gross value (including adjusted taxable gifts) exceeds $4,000,000.
- What form: Illinois Form 700, the Illinois Estate and Generation-Skipping Transfer Tax Return, filed with the Illinois Attorney General's office.
- Deadline: 9 months after the date of death — the same deadline as the federal estate tax return.
- Extensions: Available through Form 700-EXT or a written explanation to the Attorney General; a federal extension is generally recognized as support for an Illinois one.
- Payment: Tax is paid to the Illinois State Treasurer, separately from the return filed with the Attorney General.
- Penalties: Late filing is penalized at 5% of the tax due per month (up to 25%); late payment separately accrues its own penalty and interest until paid in full.
Ways to Reduce Illinois Estate Tax
- Credit shelter (bypass) trusts. Preserve both spouses' $4 million exemptions instead of losing the first spouse's exemption entirely.
- Lifetime gifting. Illinois has no gift tax, so annual exclusion gifts (currently $19,000 per recipient, $38,000 for a married couple splitting gifts) move wealth out of the taxable estate every year without using any lifetime exemption.
- Irrevocable life insurance trusts (ILITs). Keep life insurance proceeds out of the taxable estate entirely, since the trust — not the decedent — owns the policy. These need to be set up well in advance of death to be effective.
- Charitable giving and charitable remainder trusts. Assets left to qualified charities are deducted from the taxable estate, and certain trust structures allow income during life while still reducing the estate.
- State-only QTIP elections. Illinois allows a marital deduction election on the state return independent of the federal return, giving planners more flexibility to split assets between trusts in a way that minimizes the combined Illinois tax.
Because the cliff effect makes the zone just above $4 million especially costly, even modest planning — gifting a few years earlier than planned, or setting up a bypass trust — can meaningfully change the outcome for estates hovering near the line.
How Illinois Compares to Other States
| State | 2026 Exemption | Portable? |
|---|---|---|
| Illinois | $4,000,000 | No |
| New York | $7,350,000 (with its own "cliff" above 105% of the exemption) | No |
| Massachusetts | $2,000,000 | No |
| Minnesota | $3,000,000 | No |
| Most other states | No state estate tax at all | N/A |
Illinois is one of a relatively small group of states that still levies its own estate tax on top of the federal one, and its $4 million exemption is on the lower end nationally among states that do. Some Illinois residents with significant Illinois-based assets who relocate their primary residence to a state without an estate tax can reduce or eliminate this exposure, though real and tangible property physically located in Illinois generally remains subject to the tax regardless of where the owner lives.
Common Mistakes
- Assuming federal clearance means no Illinois tax. An estate can be well under the $15 million federal exemption and still owe a substantial amount to Illinois.
- Treating $4 million as a normal tax bracket. Because of the cliff effect, planning to land "a little over" the threshold is far more expensive than planning to land under it.
- Leaving everything outright to a spouse with no trust planning. This wastes the first spouse's $4 million exemption entirely, since Illinois offers no portability.
- Forgetting life insurance counts. A large policy owned personally (rather than through an ILIT) can be the single biggest reason a modest estate crosses the $4 million line.
- Confusing estate tax with Medicaid estate recovery. These are unrelated: Medicaid recovery seeks repayment for long-term care costs and applies under entirely separate rules, regardless of estate tax exposure.
Glossary
- Taxable estate
- The total value of everything a person owns at death, before the Illinois exemption is applied.
- Adjusted taxable estate
- The taxable estate reduced by $60,000, which is the figure actually run through the Illinois rate table.
- Portability
- The ability to transfer a deceased spouse's unused exemption to the surviving spouse — allowed federally, not allowed in Illinois.
- Credit shelter (bypass) trust
- A trust funded at the first spouse's death that preserves that spouse's exemption for the couple instead of losing it.
- Form 700
- The Illinois Estate and Generation-Skipping Transfer Tax Return, filed with the Illinois Attorney General.
- State death tax credit table
- The graduated federal rate schedule, frozen as of December 31, 2001, that Illinois uses to compute its own estate tax.
Frequently Asked Questions
Q: What is the Illinois estate tax exemption for 2026?
A: The Illinois estate tax exemption is $4,000,000 per person for 2026, the same as it has been since 2013. Unlike the federal exemption, it is not indexed for inflation and has no scheduled increase.
Q: Is the Illinois estate tax exemption portable between spouses?
A: No. Illinois does not allow portability of the unused exemption between spouses the way federal law does. Each spouse has their own $4 million exemption, and if the first spouse to die does not use it, it is lost unless the couple has set up trust planning, such as a credit shelter or bypass trust, in advance.
Q: Does Illinois tax the entire estate once it exceeds $4 million, or just the excess?
A: Illinois taxes the entire taxable estate once it exceeds the $4 million threshold, not just the portion above it. This is often called the Illinois estate tax cliff, because an estate just over the line can face a disproportionately large tax bill compared to an estate just under it.
Q: How is the Illinois estate tax rate calculated?
A: Illinois uses the graduated rate table that was part of the federal state death tax credit under IRC Section 2011 as it existed on December 31, 2001. The table applies to the adjusted taxable estate, which is the taxable estate reduced by $60,000, with marginal rates ranging from 0.8% to 16%.
Q: Is the Illinois estate tax the same as the federal estate tax?
A: No, they are separate taxes with separate exemptions. The federal estate tax exemption is $15 million per person for 2026 and is portable between spouses, while the Illinois exemption is $4 million per person and is not portable. Many estates owe Illinois estate tax while owing nothing to the IRS.
Q: Do heirs pay a separate Illinois inheritance tax?
A: No. Illinois has an estate tax, not an inheritance tax. The tax is calculated and paid by the estate itself before assets are distributed, so beneficiaries do not receive a separate state tax bill on what they inherit.
This calculator provides estimates for informational and educational purposes only and does not constitute legal or tax advice. It applies the standard Illinois state death tax credit rate table to your entered taxable estate value and does not account for deductions, marital or charitable elections, the circular "interrelated calculation" required when a federal return is also due, or estate-specific facts. For an exact figure, use the Illinois Attorney General's official estate tax calculator or consult a licensed Illinois estate planning attorney. Sources: Illinois Estate and Generation-Skipping Transfer Tax Act (35 ILCS 405); Illinois Attorney General Estate Tax Instruction Fact Sheet and State Death Tax Credit Table; 26 CFR § 20.2011-1.