What is the Illinois estate tax exemption?

Illinois exempts the first $4 million of a taxable estate. Estates valued at or below $4 million owe no Illinois estate tax, but estates above that face a graduated tax on the portion over the threshold, computed on the full estate value.

Does Illinois have a portability rule like the federal estate tax?

No. Illinois does not allow portability of the $4 million exemption between spouses. Unlike the federal system, a surviving spouse cannot carry over a deceased spouse's unused Illinois exemption, so estate planning matters.

Is the Illinois estate tax separate from the federal estate tax?

Yes. Illinois imposes its own estate tax with a much lower $4 million exemption than the multi-million-dollar federal threshold, so an estate can owe Illinois tax while owing nothing federally.

How is the Illinois estate tax rate structured?

Illinois uses a graduated rate based on the historic state-death-tax-credit table. Effective rates climb with estate size and can reach roughly 16% at the top, but only the value above the $4 million exemption is effectively taxed.

Are transfers to a spouse taxed by Illinois?

No. Assets passing to a surviving spouse qualify for the marital deduction and are not taxed, just as charitable bequests are deductible. Subtract those amounts before applying the exemption.

Illinois Estate Tax Calculator

Email me this result

Get this tool's output sent to your inbox, plus one useful tool a week. No spam, unsubscribe any time.

Illinois is one of a handful of states with its own estate tax, and its $4 million exemption is far below the federal threshold, so many estates owe Illinois tax while owing nothing to the IRS. This calculator estimates the state tax using the exemption and the graduated rate table Illinois inherited from the old federal state-death-tax credit.

How it works

Illinois first checks whether the taxable estate exceeds $4 million. If it does, the tax is computed on the estate’s value using a graduated schedule:

taxable estate = gross estate − deductions (debts, spouse, charity)
if taxable estate ≤ $4,000,000  →  tax = $0
else  →  tax = graduated rate table applied to the taxable estate

The graduated table starts low and rises in brackets up to about 16% at the highest estate values. Because of how the table interacts with the exemption, there is a “cliff” near $4 million where the effective tax ramps up quickly. This tool uses a bracketed approximation of the Illinois Attorney General’s estate-tax methodology.

Example

A $6 million taxable estate is well above the $4 million exemption, so it owes Illinois estate tax computed across the graduated brackets on the portion above the threshold, typically several hundred thousand dollars depending on the exact table values.

Notes

The official Illinois calculation uses an interrelated formula tied to the federal state-death-tax credit and can be sensitive near the $4 million cliff. This estimate is a planning tool; have a probate attorney run the official Form 700 calculation for an exact figure.