WeVote
Log In

Bill

Bill

SB 3847

ESTATE TAX-EXCLUSION AMOUNT

104th Regular Session Introduced by Chris Balkema and 1 co-sponsor

Illinois estate tax exclusion will be inflation-adjusted annually from 2027 onward (baseline $8,000,000) and can include DSUE, aligning Illinois with federal rules.

Added as Co-Sponsor Sen. Chris Balkema
0
WeVote Research Nonpartisan
Bill Summary · SB 3847

Summary of SB3847 (Illinois, 104th General Assembly)

Main purpose and intent

  • SB3847 proposes changes to the Illinois Estate and Generation-Skipping Transfer Tax Act to modernize the Illinois estate tax exclusion amounts and tie them to federal inflation adjustments beginning in 2027/2028.
  • Specifically, for deaths occurring on or after January 1, 2027, the Illinois estate tax exclusion amount would be adjusted annually in line with the inflation adjustment described in the Internal Revenue Code (IRC). The bill provides that the exclusion amount for 2028 and beyond would reflect this inflation-based adjustment.
  • The exclusion amount would also incorporate any deceased spouse unused exclusion amount (DSUE) available after a valid election under the IRC.

Key provisions and changes

  • Regularly adjusted exclusion amount:
    • The bill updates the Illinois tax code to adjust the Illinois estate tax exclusion amount starting with 2027 deaths, using the Inflation Adjustment described in the IRC (the specifics mirror the federal mechanism).
    • The baseline for 2027+ begins with a basic exclusion amount of $8,000,000 (subject to inflation adjustment).
  • DSUE inclusion:
    • The exclusion amount can include the deceased spousal unused exclusion amount (DSUE) available after a valid CRT election under the IRC.
  • State tax credit adjustments:
    • The bill maintains a framework for calculating the state tax credit in light of the estate tax but adds provisions related to reductions for qualified terminable interest property (QTIP) elections, aligning with federal concepts but applied to the Illinois estate tax.
  • QTIP and related elections:
    • The act allows an election on a timely Illinois return for a marital deduction for QTIP property (under IRC §2056(b)(7)) that is separate and independent from the federal election.
    • The inclusion of property in the decedent’s gross estate for Illinois tax purposes follows the same treatment as under IRS §2044 for a surviving spouse.
    • In certain trusts where a QTIP election is made, trustees cannot retain non-income-producing assets for an unreasonable period without the surviving spouse’s consent.
  • Definitions:
    • The bill retains and updates definitions for terms such as Federal estate tax, Federal transfer tax, Illinois estate tax, Qualified heir, Resident trust, Non-resident trust, and several others to align with the overall framework.
  • Effective date:
    • The act takes effect immediately upon becoming law.

Who would be affected

  • Illinois decedents (and their estates) dying on or after January 1, 2027, as well as their beneficiaries, particularly in cases involving large estates potentially subject to estate tax.
  • Trustees of Illinois trusts, especially those utilizing QTIP elections, as well as surviving spouses benefiting from DSUE considerations.
  • Tax practitioners and estates planning professionals who prepare Illinois estate tax returns, as the exclusion amount will be dynamically inflation-adjusted and DSUE-enabled.

Procedural and timeline aspects

  • Effective date: Immediate upon becoming law.
  • The key future timeline centers on the annual inflation-adjusted updates to the Illinois estate tax exclusion amount starting with deaths on or after January 1, 2027 (and extended to 2028 via inflation adjustment under IRC provisions).
  • The bill requires coordination with federal tax concepts (IRC inflation adjustments, DSUE, QTIP elections) for calculating Illinois tax credits and gross estates.

Notes

  • The bill was introduced February 6, 2026, by Sen. John F. Curran, with Sen. Chris Balkema as a co-sponsor.
  • The language indicates alignment with federal estate tax mechanics while applying them within the Illinois estate tax framework, including DSUE and QTIP-related rules.

If you would like, I can provide a side-by-side comparison with current Illinois law to highlight all divergences and potential impact estimates for different estate sizes.

Compiled from official sources — confirm details with the bill’s official record.

Sign in to ask a question.