Bill > HB1731

This bill updates the Illinois Estate and Generation-Skipping Transfer Tax Act to adjust the estate tax exclusion amount for inflation and provide more flexibility for married couples. Specifically, starting January 1, 2026, the bill introduces an "indexed exclusion amount" that will increase annually based on changes in the Consumer Price Index (CPI), which is a measure of average price changes for goods and services. For persons dying in 2026, the exclusion amount will be $5,300,000, and in subsequent years, it will be adjusted by the CPI percentage. The bill also allows married couples to utilize a "deceased spousal unused exclusion amount," which means if a surviving spouse makes a valid federal election, they can add their deceased spouse's unused estate tax exclusion to their own. Additionally, the State Death Tax Credit will now be calculated only on the portion of the decedent's adjusted taxable estate that exceeds the exclusion amount. These changes are designed to provide more tax relief and flexibility for estate planning, particularly for married couples and as inflation affects the value of estates over time.