Illinois Estate Tax
Previously we have posted and explained the changes to the federal estate taxes since the implementation of the Tax Cuts and Jobs Act. However, some people might assume that just because they are under the federal estate tax of $11,180,000, that they do not owe any estate taxes. This is not necessarily true because many states, Illinois included, have their own separate estate taxes.
Illinois, like many states, has its own estate tax that is implemented at a different threshold and with different rates than the federal tax rate. For instance, Illinois has a threshold of $4 million, which is $7,180,000 less than the federal threshold. This creates a large gap between the thresholds of Illinois and the federal government, allowing for residents to potentially owe estate taxes toward a state, but not the federal government.
Furthermore, Illinois has a graduated tax rate meaning that it has several different tax rates that scale upwards with a max of 16% for estates worth over $10.04 million. The taxes are not applied to anything under $4 million, so in order to calculate your taxes owed for an estate over $4 million the taxpayer should take the value of the estate less the $4 million threshold. After that the taxpayer will be able to calculate the amount owed.
If you have questions about the Illinois or other states estate tax, contact the professionals at the Center for Financial, Legal & Tax, Inc.