103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB2630

 

Introduced 10/26/2023, by Sen. Jil Tracy

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 405/2  from Ch. 120, par. 405A-2

    Amends the Illinois Estate and Generation-Skipping Transfer Tax Act. Provides that, for persons dying on or after January 1, 2025, the exclusion amount shall be the applicable exclusion amount calculated under Section 2010 of the Internal Revenue Code as that Section exists on the effective date of the amendatory Act, including the inflation adjustment and including any deceased spousal unused exclusion amount (currently, the exclusion amount for Illinois estate tax purposes is $4,000,000). Effective immediately.


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A BILL FOR

 

SB2630LRB103 34619 HLH 64460 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Estate and Generation-Skipping
5Transfer Tax Act is amended by changing Section 2 as follows:
 
6    (35 ILCS 405/2)  (from Ch. 120, par. 405A-2)
7    Sec. 2. Definitions.
8    "Federal estate tax" means the tax due to the United
9States with respect to a taxable transfer under Chapter 11 of
10the Internal Revenue Code.
11    "Federal generation-skipping transfer tax" means the tax
12due to the United States with respect to a taxable transfer
13under Chapter 13 of the Internal Revenue Code.
14    "Federal return" means the federal estate tax return with
15respect to the federal estate tax and means the federal
16generation-skipping transfer tax return with respect to the
17federal generation-skipping transfer tax.
18    "Federal transfer tax" means the federal estate tax or the
19federal generation-skipping transfer tax.
20    "Illinois estate tax" means the tax due to this State with
21respect to a taxable transfer.
22    "Illinois generation-skipping transfer tax" means the tax
23due to this State with respect to a taxable transfer that gives

 

 

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1rise to a federal generation-skipping transfer tax.
2    "Illinois transfer tax" means the Illinois estate tax or
3the Illinois generation-skipping transfer tax.
4    "Internal Revenue Code" means, unless otherwise provided,
5the Internal Revenue Code of 1986, as amended from time to
6time.
7    "Non-resident trust" means a trust that is not a resident
8of this State for purposes of the Illinois Income Tax Act, as
9amended from time to time.
10    "Person" means and includes any individual, trust, estate,
11partnership, association, company or corporation.
12    "Qualified heir" means a qualified heir as defined in
13Section 2032A(e)(1) of the Internal Revenue Code.
14    "Resident trust" means a trust that is a resident of this
15State for purposes of the Illinois Income Tax Act, as amended
16from time to time.
17    "State" means any state, territory or possession of the
18United States and the District of Columbia.
19    "State tax credit" means:
20    (a) For persons dying on or after January 1, 2003 and
21through December 31, 2005, an amount equal to the full credit
22calculable under Section 2011 or Section 2604 of the Internal
23Revenue Code as the credit would have been computed and
24allowed under the Internal Revenue Code as in effect on
25December 31, 2001, without the reduction in the State Death
26Tax Credit as provided in Section 2011(b)(2) or the

 

 

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1termination of the State Death Tax Credit as provided in
2Section 2011(f) as enacted by the Economic Growth and Tax
3Relief Reconciliation Act of 2001, but recognizing the
4increased applicable exclusion amount through December 31,
52005.
6    (b) For persons dying after December 31, 2005 and on or
7before December 31, 2009, and for persons dying after December
831, 2010, an amount equal to the full credit calculable under
9Section 2011 or 2604 of the Internal Revenue Code as the credit
10would have been computed and allowed under the Internal
11Revenue Code as in effect on December 31, 2001, without the
12reduction in the State Death Tax Credit as provided in Section
132011(b)(2) or the termination of the State Death Tax Credit as
14provided in Section 2011(f) as enacted by the Economic Growth
15and Tax Relief Reconciliation Act of 2001, but with the
16following modifications:
17        (1) the exclusion amount shall be: recognizing the
18    exclusion amount of only (i)
19            (A) $2,000,000 for persons dying prior to January
20        1, 2012; ,
21            (B) (ii) $3,500,000 for persons dying on or after
22        January 1, 2012 and prior to January 1, 2013; , and
23            (C) (iii) $4,000,000 for persons dying on or after
24        January 1, 2013 and before January 1, 2025; and
25            (D) for persons dying on or after January 1, 2025,
26        the applicable exclusion amount calculated under

 

 

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1        Section 2010 of the Internal Revenue Code, as that
2        Section exists on the effective date of this
3        amendatory Act of the 103rd General Assembly,
4        including the inflation adjustment under subparagraph
5        (B) of paragraph (3) of subsection (b) of that Section
6        and including any deceased spousal unused exclusion
7        amount available after a valid election is made under
8        subparagraph (A) of paragraph (5) of subsection (c) of
9        that Section; , and
10        (2) the State tax credit shall be calculated with a
11    reduction to the adjusted taxable estate for any qualified
12    terminable interest property election as defined in
13    subsection (b-1) of this Section.
14    (b-1) The person required to file the Illinois return may
15elect on a timely filed Illinois return a marital deduction
16for qualified terminable interest property under Section
172056(b)(7) of the Internal Revenue Code for purposes of the
18Illinois estate tax that is separate and independent of any
19qualified terminable interest property election for federal
20estate tax purposes. For purposes of the Illinois estate tax,
21the inclusion of property in the gross estate of a surviving
22spouse is the same as under Section 2044 of the Internal
23Revenue Code.
24    In the case of any trust for which a State or federal
25qualified terminable interest property election is made, the
26trustee may not retain non-income producing assets for more

 

 

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1than a reasonable amount of time without the consent of the
2surviving spouse.
3    "Taxable transfer" means an event that gives rise to a
4state tax credit, including any credit as a result of the
5imposition of an additional tax under Section 2032A(c) of the
6Internal Revenue Code.
7    "Transferee" means a transferee within the meaning of
8Section 2603(a)(1) and Section 6901(h) of the Internal Revenue
9Code.
10    "Transferred property" means:
11        (1) With respect to a taxable transfer occurring at
12    the death of an individual, the deceased individual's
13    gross estate as defined in Section 2031 of the Internal
14    Revenue Code.
15        (2) With respect to a taxable transfer occurring as a
16    result of a taxable termination as defined in Section
17    2612(a) of the Internal Revenue Code, the taxable amount
18    determined under Section 2622(a) of the Internal Revenue
19    Code.
20        (3) With respect to a taxable transfer occurring as a
21    result of a taxable distribution as defined in Section
22    2612(b) of the Internal Revenue Code, the taxable amount
23    determined under Section 2621(a) of the Internal Revenue
24    Code.
25        (4) With respect to an event which causes the
26    imposition of an additional estate tax under Section

 

 

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1    2032A(c) of the Internal Revenue Code, the qualified real
2    property that was disposed of or which ceased to be used
3    for the qualified use, within the meaning of Section
4    2032A(c)(1) of the Internal Revenue Code.
5    "Trust" includes a trust as defined in Section 2652(b)(1)
6of the Internal Revenue Code.
7(Source: P.A. 96-789, eff. 9-8-09; 96-1496, eff. 1-13-11;
897-636, eff. 6-1-12.)
 
9    Section 99. Effective date. This Act takes effect upon
10becoming law.