Illinois Form 700 Instructions: How to File the Illinois Estate Tax Return

Form 700 — the Illinois Estate and Generation-Skipping Transfer Tax Return — is one of the most consequential documents an executor will ever file. Get it wrong and the Attorney General's office will audit the estate, potentially triggering tens of thousands of dollars in surprise tax bills plus interest and penalties. Get it right and you free the estate's real property from the automatic state tax lien so you can actually sell it.

Here is a practical walkthrough of what the form requires, who must file it, and exactly where it goes.

Who Must File Form 700

You must file Form 700 if the decedent's gross estate plus adjusted taxable gifts exceeds $4,000,000. This threshold has not been indexed for inflation since the Illinois estate tax was restructured, so it catches many estates that would face zero federal liability — the federal exemption in 2026 is $15,000,000 per person following the enactment of the One Big Beautiful Bill Act.

Even if the estate is clearly under $4 million, executors often still need to complete the form to obtain a Certificate of Discharge from the Illinois Attorney General. Title companies will refuse to issue clear title insurance when selling the decedent's real estate unless that certificate is in hand. A submitted Form 700 proving no tax is owed is what triggers the AG's office to issue the release.

Who is required to file: The executor of a testate estate, the administrator of an intestate estate, or any person in possession of property subject to Illinois estate tax.

The Filing Deadline

Form 700 is due nine months from the date of death. If the estate also requires a federal return (Form 706), the Illinois deadline mirrors the federal one.

A six-month extension is available. To request it, file Form 700-EXT — the Application for Extension of Time to File — before the nine-month deadline expires. The extension is largely automatic if a corresponding federal extension has been granted, but it extends only the time to file, not the time to pay. Any tax owed must still be estimated and remitted by the original nine-month deadline to avoid interest accumulating.

The Interrelated Calculation: Why Form 700 Is Complicated

The Illinois estate tax does not simply apply a flat rate to the amount above $4 million. It uses an interrelated calculation that references the pre-2001 federal State Death Tax Credit table. This table was repealed federally in 2005, but Illinois preserved it as the mechanical basis for its own rates, which range from 0.8% to a maximum of 16%.

The critical trap is what practitioners call the cliff effect or threshold effect. The $4,000,000 exemption functions as an exclusion, not a bracket floor. An estate worth $3,999,999 owes nothing. An estate worth $4,150,000 does not simply pay tax on the $150,000 overage — the calculation applies retroactively to the entire estate value, producing a steeply graduated result. At $4.1 million, the Illinois tax bill is approximately $28,571. At $5 million, the bill climbs sharply above $225,000.

Because of this complexity, the Attorney General's website provides a native calculator. Using it is strongly recommended over manual computation. If you are in this territory, a licensed Illinois CPA should be involved — an arithmetic error on the interrelated calculation is not something you want to discover during an audit.

If you need to do the calculation by hand, the form's instructions walk through the State Death Tax Credit Table. The key line items are:

• Gross estate (all property, wherever situated, that passes at death)
• Adjustments for debts, expenses, and deductions
• Adjusted taxable gifts made during lifetime
• State Death Tax Credit calculation using the table
• Illinois Marital Deduction and QTIP election, if applicable

For married couples, Illinois allows a state-only QTIP election. This lets an executor defer Illinois estate taxes on property passing to a surviving spouse through a qualified trust — even if no federal return is required, because the federal exemption is so much higher. The QTIP election must be made on the Form 700 and is irrevocable once filed. This is another reason to bring a CPA into the process before you file, not after.

If you need comprehensive step-by-step guidance through the Form 700 process, the Illinois Final Tax & Estate Tax Guide covers the interrelated calculation, QTIP election mechanics, and the certificate of discharge workflow in plain language.

What to Attach to Form 700

The Attorney General's office requires the physical return plus supporting documentation. Typical attachments include:

• A copy of the federal Form 706, if filed, with all schedules
• A copy of any federal extension (Form 4768), if applicable
• Appraisals for real estate and closely held business interests
• A copy of the death certificate
• Copies of prior gift tax returns (Form 709), if lifetime gifts were made
• Trust documents, if a marital trust or QTIP trust is involved

Do not underestimate the appraisal requirement. Executors who submit subjective valuations for the family home or a family-owned business expose themselves to audit. If the AG's office determines the estate was undervalued and the correct value pushes it past $4 million, the executor is personally liable for the resulting taxes and penalties.

Where to File and Where to Pay

This is a two-destination process — the filing and the payment go to different state offices.

File the return with the Illinois Attorney General:

• For estates with property in Cook, DuPage, Lake, or McHenry counties: Chicago office
• For all other Illinois counties: Springfield office

The Attorney General's Revenue Litigation Bureau is the sole entity that administers and audits the Illinois estate tax. Do not send Form 700 to the Illinois Department of Revenue — IDOR handles income taxes (IL-1040, IL-1041), not the estate transfer tax.

Send all payments to the Illinois State Treasurer in Springfield. Since a 2012 statutory change, all estate tax payments must go to the State Treasurer, not to any local county treasurer. Cash payments are not accepted — use a check, ACH transfer, or the state's ePAY electronic payment portal. Sending a check to the wrong office will result in a rejected payment, a missed deadline, and compounding interest charges.

After You File: The Certificate of Discharge

Once the Attorney General's office processes the return and confirms either that no tax is owed or that payment has been received, it issues the Certificate of Discharge and Determination of Tax. This certificate formally releases the state's automatic estate tax lien from the decedent's real property.

You must then record the certificate with the county Recorder of Deeds in every county where the decedent owned real estate. Recording fees are typically $45 to $65 depending on document formatting compliance. Title companies will not insure a sale without confirmation that this recording has occurred.

For estates with federal tax liability, the IRS handles its own lien release process via Form 4422 — that is separate from the state process and may require escrowing sale proceeds pending final tax determination.

The Form 700 in Context

Form 700 is one of three tax filings an Illinois executor typically manages:

• Form IL-1040: The decedent's final individual income tax return for the year of death, filed with IDOR
• Form IL-1041: The fiduciary income tax return for income the estate generates during the probate period, also filed with IDOR
• Form 700: The estate transfer tax return, filed with the Attorney General

These three filings interact but go to different agencies on different deadlines. Missing any of them — or confusing which agency handles which — is one of the most common executor errors in Illinois.

The Illinois Final Tax & Estate Tax Guide walks through all three filings in sequence, including a 180-day deadline calendar, Form 700 preparation checklist, and templates for organizing the documentation handoff to a CPA or probate attorney.

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