Revised July 1, 2012 Notice
Regarding Payment of Illinois Estate Tax and Fact Sheet
For decedents dying prior to 2012, see the Instruction Fact Sheets previously posted on this
website covering the specific year of death at issue subject to taxation.
For persons dying in 2012, the Federal exemption for Federal estate tax purposes is
$5,120,000. However, the exemption equivalent for Illinois estate tax purposes is $3,500,000.
Therefore, tentative taxable estates with adjusted taxable gifts between $3,500,000 and $5,120,000
will owe an Illinois estate tax without any corresponding Federal estate tax liability. In such
situations, the estate representative is to prepare and file the Illinois Estate Tax Return, Form 700,
together with a Federal Form 706, Federal Estate Tax Return, or any other form containing the same
information, even though the Federal return is not required to be filed with the Internal Revenue
Service. The Federal Form 706 must include all schedules, appraisals, wills, trusts, attachments, etc.
as the Federal Form 706 would have for a 2011 decedent with a tentative taxable estate plus adjusted
taxable gifts over $2,000,000. The Illinois estate tax will be determined using the inter-related
calculation for 2012 decedents. The calculator at the Illinois Attorney General’s website may be
used for this computation. (www.illinoisattorneygeneral.gov) To make the computation, the
amounts of the Illinois Tentative Taxable Estate (Line 3, Schedule A or B, Form 700) and the Illinois
Tentative Taxable Estate with Adjusted Taxable Gifts (Line 5, Schedule A or B, Form 700) without
the State Death Tax Deduction are required for input into the 2012 Estate Tax Calculator to
determine the amount of Illinois estate tax due. Please note that the Calculator will not perform the
computation of Illinois estate tax due unless amounts are inserted in both of the boxes described
above.
When the tentative taxable estate plus adjusted taxable gifts exceeds $5,120,000 the Illinois
Estate Tax return, Form 700, is to be prepared in the same manner for 2012 as for 2011, and must
therefore include a copy of the Federal Form 706 with all attachments.
For both resident and non-resident decedents, the tax base will be calculated assuming all
assets are located within Illinois. (Line 6, Schedule A or B, Form 700). 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.
Illinois QTIP election (Qualified Terminable Interest Property)
For persons dying January 1, 2009 and after, the estate may make a QTIP election for Illinois
purposes which is larger than the Federal QTIP election. The Illinois QTIP must be elected on the
timely filed Illinois Return. The Illinois QTIP election will follow Federal statutes and rules for
treatment of such elected property as passing to the surviving spouse and inclusion for Illinois
purposes on any Illinois Estate Tax Return of the surviving spouse. The maximum Illinois QTIP
election allowable for decedents dying in 2012 is $1,620,000.
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