Does Illinois have an inheritance tax?

No. Illinois does not levy an inheritance tax on beneficiaries. Heirs who receive money or property from an Illinois estate owe no state inheritance tax, regardless of their relationship to the deceased.

What is the difference between estate tax and inheritance tax?

An estate tax is paid by the deceased's estate before assets are distributed, based on the total estate value. An inheritance tax is paid by each heir on what they personally receive. Illinois has an estate tax but no inheritance tax.

Will I owe federal tax on an inheritance in Illinois?

Inherited assets are generally not taxable income at the federal level either. However, later income from inherited assets, like interest, dividends, or gains after you receive them, can be taxable. The inheritance itself is not income.

Does the heir's relationship affect inheritance tax in Illinois?

In states that levy inheritance tax, the rate depends on whether you are a spouse, child, sibling, or unrelated heir. Because Illinois has no inheritance tax, your relationship to the deceased does not create any state tax on what you inherit.

Which states do charge inheritance tax?

A small number of states, including Pennsylvania, Kentucky, New Jersey, Maryland, and Nebraska, charge inheritance tax with rates that rise for more distant heirs. Illinois is not among them; it relies on its estate tax instead.

Illinois Inheritance Tax Calculator

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A common worry for Illinois beneficiaries is that they will owe tax on money or property they inherit. The good news is that Illinois has no inheritance tax, so heirs receive their share free of any state inheritance levy. This tool confirms that result and clears up the frequent confusion with the separate Illinois estate tax.

How it works

Two different taxes are often mixed up. An inheritance tax is charged to the heir; an estate tax is charged to the estate. Illinois uses only the estate tax:

Illinois inheritance tax on what an heir receives = $0  (always)
Illinois estate tax = paid by the estate, on estates over $4 million

Because Illinois imposes no inheritance tax, the relationship between you and the deceased, spouse, child, sibling, or unrelated, does not change your result. In inheritance-tax states that relationship would set the rate, which is why this tool still asks, but in Illinois the answer stays $0.

Example

If you inherit $250,000 from an Illinois relative, your Illinois inheritance tax is $0 no matter your relationship. The estate itself only owes Illinois estate tax if the total estate exceeds the $4 million exemption, and that is paid before you receive your share.

Notes

Inheritance is generally not federal taxable income either, though income later earned on inherited assets can be taxed. If the estate is large, see the Illinois estate tax calculator, which is the levy that actually applies in Illinois.