Illinois taxes an estate itself, before anything passes to the people who inherit it. That is an estate tax, and the Illinois one is the tax that reaches ordinary good fortune. The federal estate tax starts at $15,000,000 per person in 2026, which puts it out of reach of nearly everyone.1 Illinois draws its own line at $4,000,000, and a paid-off house, two retirement accounts, and a life insurance policy cross it more often than people expect.2 This page is the plain account of how the tax works: who owes it, how the state computes it, why married couples are caught by a rule most people have never heard of, and how to get your own number. The essays linked along the way go deeper into the planning. Nothing here is advice about your estate; it is the law, with the arithmetic shown.
Does Illinois have an inheritance tax?
No. Illinois has an estate tax and no inheritance tax, and what people call the Illinois death tax is that estate tax. The difference matters to how the bill arrives. An inheritance tax is collected from the people who receive property, each on their share. An estate tax is levied on the estate itself, before anything passes. In Illinois your heirs do not get separate bills. The executor files one Illinois return, Form 700, with the Illinois Attorney General, and the estate settles one amount, due nine months after the death.2
Who has to file is the first question, and the answer is wider than who owes. A return is required whenever everything you own at death, plus the taxable gifts you made during life, adds up to more than $4,000,000, whether or not a federal return is due.2 Everything counts at what it would sell for today: the house, the retirement and brokerage accounts, a business or farmland at a buyer's price, and the death benefit of any life insurance you own. The insurance surprises nearly everyone. It usually pays your family free of income tax, and when you own the policy it lands inside the taxable estate all the same.3
Two more cases matter. A resident of another state who still owns Illinois real estate can owe Illinois tax on the Illinois share of the estate once the estate crosses the line, so moving to Florida moves you and not your Illinois building.4 And the $4,000,000 belongs to each person, not to each couple, with the consequences described two sections down.
How is the Illinois estate tax calculated?
The $4,000,000 is a threshold, not a deduction. Below it, nothing is owed. Once an estate crosses it, Illinois computes tax on the whole taxable estate, the estate after the deductions the law allows, at graduated rates that run to 16%.2 The arithmetic is circular: the tax depends on the amount being taxed, and that amount depends on the tax. Illinois borrows an old federal table for state death taxes, frozen as it stood in 2001, and runs it until the two agree, which is why the Attorney General publishes its own calculator rather than a rate chart.5
The state's own published examples set the scale. An estate of exactly $4,000,000 owes $0. An estate of $5,000,000, all of it Illinois property, owes $285,714.3 From there the figures run roughly as follows under 2026 law: $4,500,000 owes about $142,857; $6,000,000 about $456,071; $8,000,000 about $680,634; $10,000,000 about $926,923. Under those same assumptions, a single all-Illinois estate with no deductions, the federal estate tax on every one of them is zero.
The line is a ramp, not a trapdoor. The story that one dollar over the line costs hundreds of thousands is a myth: on the state's own computation, an estate of $4,000,001 owes about 29 cents, which the calculator displays as $0. The truth is steep in a different way. From the first dollar past the line, each additional dollar of estate costs about 28.6 cents of Illinois tax, all the way to roughly $5.4 million, before the graduated schedule eases the slope.3 The full table, the chart of that ramp, and the method are set out on the calculator's reference page.
Two things about the federal side belong here, because people assume the two taxes stack. They do not, until the estate is quite large. Illinois tax paid comes off the estate before the federal tax is computed.6 With the federal exclusion at $15,000,000, that keeps the federal tax at $0 until a single person's estate reaches roughly $16.9 million, on the same simplified illustration. Below that, Illinois is the only government taxing the estate. Above it, the two together keep climbing; at $25 million the combined result is roughly 23% of the estate.
The tax is due in cash. That bites hardest when the estate is a farm, a shop, or a building with the family name on the lease rather than brokerage balances: the money has to come from somewhere, and sometimes it comes from selling the one thing everyone meant to keep. The four-million-dollar line walks through the lawful, well-worn planning tools that can reduce that risk when they fit: trusts that preserve both spouses' exclusions, lifetime gifts, insurance owned outside the estate, and honest counting before any of it.
What happens to a married couple's two exemptions?
Federal law lets a surviving spouse add a late spouse's unused exclusion to their own. The estate makes that choice on the first spouse's federal return, and the rule is called portability.1 Illinois has no such rule. The Attorney General says so in one sentence: the portability of the unused federal exemption "is inapplicable to the computation and assessment of the Illinois Estate Tax."7 Each spouse has $4,000,000, and whatever the first spouse does not use is gone.
No Illinois portability is the trap in the most natural estate plan there is. "Everything to my spouse" owes nothing at the first death, because transfers between spouses are deductible. It also uses none of the first spouse's $4,000,000. Then the survivor dies owning both halves, with one exemption against all of it.
Take a hypothetical couple with $7,000,000 between them, the same combined estate at both deaths, no growth, no spending, nothing to charity. If everything passes outright to the survivor, the second estate is $7,000,000 against one $4,000,000 exemption; put $7,000,000 into the calculator and Illinois takes about $565,603. If instead the first estate sets $4,000,000 aside in a trust drafted to use the first spouse's exclusion and stay outside the survivor's estate, one the survivor can still draw on, the second estate is $3,000,000, which is $7,000,000 less the $4,000,000 set aside. That is below the line, and Illinois takes $0 at either death. Same family, same money, same two deaths. The difference comes from the planning, and the Illinois return, at the first one.
The return has a catch. Using the first exemption takes the right structure in the estate plan, and the first estate generally files an Illinois return even when no tax is due, making on that return the Illinois choice that keeps the exemption; Illinois allows that choice even where the federal return does something different.2 A first estate that files nothing can lose the opportunity. The four-million-dollar line goes deeper on the married-couple mechanics. Some couples are far enough past the line that preserving the first exemption is not the whole problem; for them, the trust that moves assets out of both estates while one spouse can still draw on them has its own essay, The trust that bets on your marriage, and its own costs.
Will the Illinois exemption rise to $8 million?
Not yet. Senate Bill 3847 in the 104th General Assembly would raise the Illinois exclusion to $8,000,000 for deaths on or after January 1, 2027, index it for inflation from 2028, and let a surviving spouse use a deceased spouse's unused exclusion.8 When we last checked the bill's status, on November 9, 2026, it had been referred to the Senate Assignments Committee and gained a co-sponsor; it has not passed either chamber and is not law. Illinois has had bills like it before. Until one passes, the $4,000,000 line and the no-portability rule are the law, and planning that waits for the bill is planning on a hope. We date the check on this page so you can see how current it is.
When should you use the calculator?
Use it when you have made the list. The estate on a yellow pad, the house at what it would sell for this spring, the accounts, the business or land at a buyer's price, the insurance death benefit, and the taxable gifts you have already made: add them, and put the total in. The Illinois estate tax calculator runs the state's own interrelated computation, validated against the Attorney General's published examples, and shows the Illinois and federal figures side by side for a single all-Illinois estate with no deductions.3
Refine for property outside Illinois, or try the proposed law
- Illinois estate tax
- $456,071
- Federal estate tax
- $0
- Both taxes combined
- $456,0717.6% of the estate
Illinois is the only estate tax that applies at this size. The estate is over the Illinois exclusion but under the federal one.
This is a simplified model, not your actual tax return or plan. It only knows what you type in, leaves out rules that may apply to you, and cannot weigh the other facts and trade-offs a real decision depends on. Before you act, talk with a professional who knows your whole situation.
Under 2026 law, reviewed September 3, 2026. One taxable estate after deductions; nothing to a spouse or charity. Full methodology and sources.
Use it twice if you are married: once for your combined estate, and once for the combined estate less $4,000,000, which stands for the first spouse's exemption preserved at the first death. The gap between the two answers is a rough illustration of what the first estate's return can preserve. Then use it a third time with the estate as it may look in ten years, because the Illinois line does not move with inflation and your estate may.
What it leaves out is the real work. Deductions for debts, expenses, and charity; property in other states; the actual values a buyer would pay for a business; the election on the first return; the trusts, gifts, and insurance ownership that change the inputs. Those are decisions for your estate attorney and CPA, and the calculator is the number you bring to that meeting, not the answer you leave with. If the hard part is coordinating the numbers, the documents, and the timing, that is the work we do with Illinois households at and near retirement. The invitation at the foot of the page is a first conversation, not a plan.
