Money & Debt

The following question was originally submitted to John Roska, a lawyer Someone who represents clients in courts or who gives legal advice and writer for the weekly column "The Law Q&A" in the Champaign News Gazette. The article has been updated to include changes in the law and additional information.

Question

When does someone have to pay inheritance tax?  If it has to be paid, how much is the tax?

Answer

First, it’s important to distinguish between estate All of the property a person owns at their death taxes, and inheritance taxes. They’re 2 different things but very few people have to worry about either.  

An estate tax is imposed by federal and state (where applicable) authorities on the value of an estate. It is paid out of the estate before assets Anything a person owns that has financial value are transferred to intended beneficiaries and heirs. An inheritance tax is imposed by federal and state authorities (where applicable) on someone who actually receives an inheritance, after the asset has been received by the beneficiary A person that gets property or money from someone when they die /heir Anyone who receives property from someone who has died .  

As of 2021, there is no federal or Illinois tax on inheritances. Some states do impose inheritance taxes, but not Illinois. Illinoisans who inherit money or property, or receive it as a gift, are not taxed.