IL
Illinois House Bill HB1731

Illinois 2025-2026 Regular Session

Illinois House Bill HB1731 Compare Versions

Only one version of the bill is available at this time.
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11 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB1731 Introduced , by Rep. Ryan Spain SYNOPSIS AS INTRODUCED: 35 ILCS 405/2 from Ch. 120, par. 405A-2 Specifies that the amendatory Act may be referred to as the Estate Tax Inflation Law. Amends the Illinois Estate and Generation-Skipping Transfer Tax Act. Provides that, for persons dying on or after January 1, 2026, if a valid election has been made under the Internal Revenue Code allowing a person to take into account a federal deceased spousal unused exclusion amount for the purposes of calculating the person's federal estate tax, then the person's Illinois exclusion amount shall include the Illinois deceased spousal unused exclusion amount for the deceased spouse with respect to whom the federal election was made. Provides that the exclusion amount used to calculate the decedent's Illinois estate tax shall be increased each year by the percentage increase, if any, in the Consumer Price Index. Provides that, for the purpose of calculating the Illinois Estate Tax, the State Death Tax Credit shall be calculated only on the portion of the decedent's adjusted taxable estate that exceeds the decedent's Illinois exclusion amount. Effective immediately. LRB104 10440 HLH 20515 b A BILL FOR 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB1731 Introduced , by Rep. Ryan Spain SYNOPSIS AS INTRODUCED: 35 ILCS 405/2 from Ch. 120, par. 405A-2 35 ILCS 405/2 from Ch. 120, par. 405A-2 Specifies that the amendatory Act may be referred to as the Estate Tax Inflation Law. Amends the Illinois Estate and Generation-Skipping Transfer Tax Act. Provides that, for persons dying on or after January 1, 2026, if a valid election has been made under the Internal Revenue Code allowing a person to take into account a federal deceased spousal unused exclusion amount for the purposes of calculating the person's federal estate tax, then the person's Illinois exclusion amount shall include the Illinois deceased spousal unused exclusion amount for the deceased spouse with respect to whom the federal election was made. Provides that the exclusion amount used to calculate the decedent's Illinois estate tax shall be increased each year by the percentage increase, if any, in the Consumer Price Index. Provides that, for the purpose of calculating the Illinois Estate Tax, the State Death Tax Credit shall be calculated only on the portion of the decedent's adjusted taxable estate that exceeds the decedent's Illinois exclusion amount. Effective immediately. LRB104 10440 HLH 20515 b LRB104 10440 HLH 20515 b A BILL FOR
22 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB1731 Introduced , by Rep. Ryan Spain SYNOPSIS AS INTRODUCED:
33 35 ILCS 405/2 from Ch. 120, par. 405A-2 35 ILCS 405/2 from Ch. 120, par. 405A-2
44 35 ILCS 405/2 from Ch. 120, par. 405A-2
55 Specifies that the amendatory Act may be referred to as the Estate Tax Inflation Law. Amends the Illinois Estate and Generation-Skipping Transfer Tax Act. Provides that, for persons dying on or after January 1, 2026, if a valid election has been made under the Internal Revenue Code allowing a person to take into account a federal deceased spousal unused exclusion amount for the purposes of calculating the person's federal estate tax, then the person's Illinois exclusion amount shall include the Illinois deceased spousal unused exclusion amount for the deceased spouse with respect to whom the federal election was made. Provides that the exclusion amount used to calculate the decedent's Illinois estate tax shall be increased each year by the percentage increase, if any, in the Consumer Price Index. Provides that, for the purpose of calculating the Illinois Estate Tax, the State Death Tax Credit shall be calculated only on the portion of the decedent's adjusted taxable estate that exceeds the decedent's Illinois exclusion amount. Effective immediately.
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1111 1 AN ACT concerning revenue.
1212 2 Be it enacted by the People of the State of Illinois,
1313 3 represented in the General Assembly:
1414 4 Section 1. References to Act. This Act may be referred to
1515 5 as the Estate Tax Inflation Law.
1616 6 Section 5. The Illinois Estate and Generation-Skipping
1717 7 Transfer Tax Act is amended by changing Section 2 as follows:
1818 8 (35 ILCS 405/2) (from Ch. 120, par. 405A-2)
1919 9 Sec. 2. Definitions.
2020 10 "Consumer Price Index" means the index published by the
2121 11 Bureau of Labor Statistics of the United States Department of
2222 12 Labor that measures the average change in prices of goods and
2323 13 services purchased by all urban consumers, United States city
2424 14 average, all items, 1982-84 = 100.
2525 15 "Federal estate tax" means the tax due to the United
2626 16 States with respect to a taxable transfer under Chapter 11 of
2727 17 the Internal Revenue Code.
2828 18 "Federal generation-skipping transfer tax" means the tax
2929 19 due to the United States with respect to a taxable transfer
3030 20 under Chapter 13 of the Internal Revenue Code.
3131 21 "Federal return" means the federal estate tax return with
3232 22 respect to the federal estate tax and means the federal
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3636 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB1731 Introduced , by Rep. Ryan Spain SYNOPSIS AS INTRODUCED:
3737 35 ILCS 405/2 from Ch. 120, par. 405A-2 35 ILCS 405/2 from Ch. 120, par. 405A-2
3838 35 ILCS 405/2 from Ch. 120, par. 405A-2
3939 Specifies that the amendatory Act may be referred to as the Estate Tax Inflation Law. Amends the Illinois Estate and Generation-Skipping Transfer Tax Act. Provides that, for persons dying on or after January 1, 2026, if a valid election has been made under the Internal Revenue Code allowing a person to take into account a federal deceased spousal unused exclusion amount for the purposes of calculating the person's federal estate tax, then the person's Illinois exclusion amount shall include the Illinois deceased spousal unused exclusion amount for the deceased spouse with respect to whom the federal election was made. Provides that the exclusion amount used to calculate the decedent's Illinois estate tax shall be increased each year by the percentage increase, if any, in the Consumer Price Index. Provides that, for the purpose of calculating the Illinois Estate Tax, the State Death Tax Credit shall be calculated only on the portion of the decedent's adjusted taxable estate that exceeds the decedent's Illinois exclusion amount. Effective immediately.
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6767 1 generation-skipping transfer tax return with respect to the
6868 2 federal generation-skipping transfer tax.
6969 3 "Federal transfer tax" means the federal estate tax or the
7070 4 federal generation-skipping transfer tax.
7171 5 "Illinois deceased spousal exclusion amount" means the
7272 6 difference between (i) the applicable exclusion amount for the
7373 7 deceased spouse under this Act on the date of the deceased
7474 8 spouse's death and (ii) the amount with respect to which the
7575 9 tentative tax was determined under Section 2001 of the
7676 10 Internal Revenue Code on the estate of the deceased spouse. In
7777 11 no event may the Illinois deceased spousal exclusion amount be
7878 12 less than zero.
7979 13 "Illinois estate tax" means the tax due to this State with
8080 14 respect to a taxable transfer.
8181 15 "Illinois generation-skipping transfer tax" means the tax
8282 16 due to this State with respect to a taxable transfer that gives
8383 17 rise to a federal generation-skipping transfer tax.
8484 18 "Illinois transfer tax" means the Illinois estate tax or
8585 19 the Illinois generation-skipping transfer tax.
8686 20 "Indexed exclusion amount means:
8787 21 (1) for persons dying on or after January 1, 2026 and
8888 22 dying before January 1, 2027, $5,300,000; and
8989 23 (2) for persons dying on or after January 1, 2027, the
9090 24 exclusion amount calculated under this paragraph (2) for
9191 25 the calendar year in which the person dies; for each
9292 26 calendar year that begins on or after January 1, 2027, the
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103103 1 indexed exclusion amount for the subject calendar year
104104 2 shall be the product generated by multiplying the indexed
105105 3 exclusion amount for immediately preceding calendar year
106106 4 by one plus the percentage increase, if any, in the
107107 5 Consumer Price Index for the 12-month period ending on
108108 6 September 30 of the immediately preceding calendar year.
109109 7 "Internal Revenue Code" means, unless otherwise provided,
110110 8 the Internal Revenue Code of 1986, as amended from time to
111111 9 time.
112112 10 "Non-resident trust" means a trust that is not a resident
113113 11 of this State for purposes of the Illinois Income Tax Act, as
114114 12 amended from time to time.
115115 13 "Person" means and includes any individual, trust, estate,
116116 14 partnership, association, company or corporation.
117117 15 "Qualified heir" means a qualified heir as defined in
118118 16 Section 2032A(e)(1) of the Internal Revenue Code.
119119 17 "Resident trust" means a trust that is a resident of this
120120 18 State for purposes of the Illinois Income Tax Act, as amended
121121 19 from time to time.
122122 20 "State" means any state, territory or possession of the
123123 21 United States and the District of Columbia.
124124 22 "State tax credit" means:
125125 23 (a) For persons dying on or after January 1, 2003 and
126126 24 through December 31, 2005, an amount equal to the full credit
127127 25 calculable under Section 2011 or Section 2604 of the Internal
128128 26 Revenue Code as the credit would have been computed and
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139139 1 allowed under the Internal Revenue Code as in effect on
140140 2 December 31, 2001, without the reduction in the State Death
141141 3 Tax Credit as provided in Section 2011(b)(2) or the
142142 4 termination of the State Death Tax Credit as provided in
143143 5 Section 2011(f) as enacted by the Economic Growth and Tax
144144 6 Relief Reconciliation Act of 2001, but recognizing the
145145 7 increased applicable exclusion amount through December 31,
146146 8 2005.
147147 9 (b) For persons dying after December 31, 2005 and on or
148148 10 before December 31, 2009, and for persons dying after December
149149 11 31, 2010, an amount equal to the full credit calculable under
150150 12 Section 2011 or 2604 of the Internal Revenue Code as the credit
151151 13 would have been computed and allowed under the Internal
152152 14 Revenue Code as in effect on December 31, 2001, without the
153153 15 reduction in the State Death Tax Credit as provided in Section
154154 16 2011(b)(2) or the termination of the State Death Tax Credit as
155155 17 provided in Section 2011(f) as enacted by the Economic Growth
156156 18 and Tax Relief Reconciliation Act of 2001, but with the
157157 19 following modifications:
158158 20 (1) the exclusion amount shall be: recognizing the
159159 21 exclusion amount of only (i)
160160 22 (A) $2,000,000 for persons dying prior to January
161161 23 1, 2012; ,
162162 24 (B) (ii) $3,500,000 for persons dying on or after
163163 25 January 1, 2012 and prior to January 1, 2013; , and
164164 26 (C) (iii) $4,000,000 for persons dying on or after
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175175 1 January 1, 2013 and prior to January 1, 2026; and
176176 2 (D) for persons dying on or after January 1, 2026,
177177 3 the indexed exclusion amount, plus any Illinois
178178 4 deceased spousal exclusion amount allowed under
179179 5 paragraph (2); , and
180180 6 (2) for persons dying on or after January 1, 2026, if a
181181 7 valid election has been made under subparagraph (A) of
182182 8 paragraph (5) of subsection (c) of Section 2010 of the
183183 9 Internal Revenue Code allowing the person to take into
184184 10 account a federal deceased spousal unused exclusion amount
185185 11 for the purposes of calculating the person's federal
186186 12 estate tax, then the exclusion amount under paragraph (1)
187187 13 shall include the Illinois deceased spousal unused
188188 14 exclusion amount for the deceased spouse with respect to
189189 15 whom the federal election was made;
190190 16 (3) for persons dying on or after January 1, 2026, the
191191 17 State Death Tax Credit shall be calculated only on the
192192 18 portion of the decedent's adjusted taxable estate that
193193 19 exceeds the exclusion amount determined under paragraph
194194 20 (1); and
195195 21 (4) the State tax credit shall be calculated with a
196196 22 reduction to the adjusted taxable estate for any qualified
197197 23 terminable interest property election as defined in
198198 24 subsection (b-1) of this Section.
199199 25 (b-1) The person required to file the Illinois return may
200200 26 elect on a timely filed Illinois return a marital deduction
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211211 1 for qualified terminable interest property under Section
212212 2 2056(b)(7) of the Internal Revenue Code for purposes of the
213213 3 Illinois estate tax that is separate and independent of any
214214 4 qualified terminable interest property election for federal
215215 5 estate tax purposes. For purposes of the Illinois estate tax,
216216 6 the inclusion of property in the gross estate of a surviving
217217 7 spouse is the same as under Section 2044 of the Internal
218218 8 Revenue Code.
219219 9 In the case of any trust for which a State or federal
220220 10 qualified terminable interest property election is made, the
221221 11 trustee may not retain non-income producing assets for more
222222 12 than a reasonable amount of time without the consent of the
223223 13 surviving spouse.
224224 14 "Taxable transfer" means an event that gives rise to a
225225 15 state tax credit, including any credit as a result of the
226226 16 imposition of an additional tax under Section 2032A(c) of the
227227 17 Internal Revenue Code.
228228 18 "Transferee" means a transferee within the meaning of
229229 19 Section 2603(a)(1) and Section 6901(h) of the Internal Revenue
230230 20 Code.
231231 21 "Transferred property" means:
232232 22 (1) With respect to a taxable transfer occurring at
233233 23 the death of an individual, the deceased individual's
234234 24 gross estate as defined in Section 2031 of the Internal
235235 25 Revenue Code.
236236 26 (2) With respect to a taxable transfer occurring as a
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247247 1 result of a taxable termination as defined in Section
248248 2 2612(a) of the Internal Revenue Code, the taxable amount
249249 3 determined under Section 2622(a) of the Internal Revenue
250250 4 Code.
251251 5 (3) With respect to a taxable transfer occurring as a
252252 6 result of a taxable distribution as defined in Section
253253 7 2612(b) of the Internal Revenue Code, the taxable amount
254254 8 determined under Section 2621(a) of the Internal Revenue
255255 9 Code.
256256 10 (4) With respect to an event which causes the
257257 11 imposition of an additional estate tax under Section
258258 12 2032A(c) of the Internal Revenue Code, the qualified real
259259 13 property that was disposed of or which ceased to be used
260260 14 for the qualified use, within the meaning of Section
261261 15 2032A(c)(1) of the Internal Revenue Code.
262262 16 "Trust" includes a trust as defined in Section 2652(b)(1)
263263 17 of the Internal Revenue Code.
264264 18 (Source: P.A. 96-789, eff. 9-8-09; 96-1496, eff. 1-13-11;
265265 19 97-636, eff. 6-1-12.)
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