State of Illinois Estate Tax Treatment of 2013 Decedents

Illinois has issued a publication relating to the estate tax treatment of 2013 decedents.

For persons dying in 2013, tentative taxable estates with adjusted taxable gifts between $4.0 million (the Illinois exclusion amount) and $5.25 million (the federal exemption amount) will owe an Illinois estate tax without any corresponding federal estate tax liability. In such situations, the estate representative must prepare and file the Illinois Estate Tax Return together with federal Form 706, even though the federal return is not required to be filed with the Internal Revenue Service.

The Illinois estate tax is determined using the inter-related calculation for 2013 decedents. The calculator at the Illinois Attorney General’s website may be used for this computation. If the tentative taxable estate plus adjusted taxable gifts exceed $5.25 million, the filing of Form 700 must include a copy of the federal Form 706 with all attachments. For both resident and non-resident decedents, the tax base is calculated assuming all assets are located within Illinois. The percentage of Illinois assets to total assets is then computed with the percentage applied to the tax base for apportionment purposes to determine the amount of Illinois estate tax due. The maximum Illinois qualified terminable interest property (QTIP) election allowable for decedents dying in 2013 is $1.25 million.

Individuals who are parties to a civil union occurring on or after June 1, 2011 are subject to the same obligations and responsibilities and afforded the same protections and benefits as apply to spouses in a marriage recognized for Federal estate tax purposes. An Illinois marital deduction, including QTIP elections is allowable for property passing from a decedent to his or her partner in a civil union to the same extent that property transferred to a husband or wife is allowable as a marital deduction, including QTIP elections


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