Pending Bipartisan Illinois Bill to Increase Estate Tax Exemption - Tuohy Law Offices
Pending Bipartisan Illinois Bill to Increase Estate Tax Exemption
April 2, 2024 tlaw
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Pending Bipartisan Illinois Bill to Increase Estate Tax Exemption

With taxes on most people’s minds, there is good news ending in the Illinois legislature.  However, pending is the operative word since the bill has been on hold for over a year. But there is hope.

Estate Tax Exemptions

Illinois estate tax begins at an estate value more than $4 million. Each person has an exemption of $4 million, with a graduated tax of up to 16% of any amount over the exemption. If your estate exceeds $4 million and you are married, you can protect up to $8 million of your estate tax-free with an AB Living Trust.

The federal estate tax exemption is $13.61 million in 2024. However, it is due to “sunset” in 2026 to approximately $6.5 million, with an estate tax of 37 to 40%.

Illinois Resident Tax Protection

With inflation rising and personal estate size increasing, the Illinois estate tax protection exemption lags far behind the federal exemption. It will continue to be an unequal tax burden when the federal estate tax sunsets in 2026.

Additionally, there are over 1.2 million small businesses in Illinois, and 98% of all farms in Illinois are family-owned. These factors place an unfair financial burden on Illinois residents who wish to pass on their farms or businesses to family members when they die.

Higher Illinois Estate Tax Exemption

Illinois Senate Bill 2921, introduced by State Sen. Dave Koehler, D-Peoria, and Illinois House Bill 4600, introduced by State Rep. Sharon Chung, D-Bloomington, would reform the Illinois Estate and Generation Transfer Tax Act and increase the personal estate tax exemption to $6 million for each person.

We will anxiously keep an eye out for the passage of this. Bill and announce the good news at that time!

Contact us today for further information or visit Tuohy Law Offices now.

Tom Tuohy
17W220 22nd Street, Suite 300  
Oakbrook Terrace, Illinois, 60181

This news post has been created for information and planning purposes. It is not intended to be, nor should it be substituted for, legal advice, which turns on specific facts and laws in specific jurisdictions. No reader of this article should act or refrain from acting based on any information included in, or accessible through, this article without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the reader’s state, country or other appropriate licensing jurisdiction.