Illinois Estate Taxes

Effective January 1, 2012, the state of Illinois and the Illinois Attorney General published revised requirements related to estate tax.

Following is an overview of the current estate tax laws in effect for Illinois.  If you are looking for information about federal income tax, please visit our web site’s “Tax Relief” page.

What are estate taxes?

Estate taxes refer to a person’s property left behind at the time of the person’s death.  It is normal that after death a person’s property will pass to family, friends, or others through a will or if the person does not have a will under the guidance of applicable state or federal probate laws.

For the transfer of property through an estate, government agencies including certain states and the federal government through the Internal Revenue Service (IRS) impose tax on such transfers against the estate itself.  Since the property is going to a person or persons who did not pay for the property or interest in the property, it is treated as income when it exceeds a certain threshold and therefore a tax is imposed on the estate.  This is the estate tax.

Who is required to file an estate tax return in Illinois?

Decedents must file an estate tax return if the decedent was a resident of Illinois or the estate includes real or tangible personal property actually located in the state of Illinois.

What are the thresholds where estate taxes apply?

If the decedent dies in 2012, the estate of a decedent must pay Illinois estate tax if the gross estate has a value of at least $3.5 million.  In 2013, the minimum value of an estate before Illinois estate taxes applies rises to $4.

What forms must I file related to Illinois State estate taxes?  And where do I file the forms?

If the decedent was a resident of Illinois at the time of his or her death, the decedent’s estate must file Form 700 Illinois Estate Tax Return, as well as Federal Form 706 Federal Estate Tax Return.

Form 700 and a copy of Form 706 must be sent to one of two addresses based on the county where the decedent lived.

Those in Cook, DuPage, Lake, or McHenry counties should send the forms to:

Office of the Attorney General

Revenue Litigation Bureau – Estate Tax Section

100 West Randolph Street

13th Floor

Chicago, Illinois 60601

Those in all other counties in Illinois should send the forms to:

Office of the Attorney General

Revenue Litigation Bureau – Estate Tax Section

500 South Second Street

Springfield, Illinois 62706

When are Illinois estate taxes due?

Illinois estate taxes must be filed and paid within nine months after the decedent’s date of death unless you receive an extension of time to file the return.  You can obtain an extension of time to file the estate taxes, but you must still pay an estimate of estate tax due by the original due date.  For any estate tax amount not paid within nine months of the decedent’s death, the estate may be assessed a penalty and interest on the unpaid balance.

Who can I contact if I have questions about Illinois estate or other taxes?

If you have questions about estate or other taxes, start by calling the telephone number located at the top of this page.  You can have a confidential conversation with a tax attorney free of charge and with no further obligation who can answers your questions about Illinois taxes.

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by Mark Johnston

Mark has been a contributor to legal web sites related to bankruptcy, tax, and criminal law since 2011. He has an Accounting degree from Texas A&M University.