(The Center Square) – Legislation to change the state’s death tax credit could help families hold on to their farms as land values rise.
Illinois Farm Bureau Associate Director of State Legislation Mark Raney said farmers currently pay the estate tax on everything more than $4 million in value, which is easily exceeded by the average Illinois grain farm with 1,500 acres.
“And that doesn’t include the value of any of your equipment, your trucks, the value of any livestock you may have harvested, corn or soy, doesn’t include barns, doesn’t include your house,” Raney told The Center Square.
Raney said the Family Farm Preservation Act changes the $4 million threshold and would be huge for agriculture in Illinois.
“We want that number to be $6 million, however, the first 6 million is tax-free. So if your estate is $6.5 million, you are taxed on $500,000 and then we tie that $6 million to inflation,” Raney said.
Raney said the bill would alleviate the discrepancy between high land values and income.
State Rep. Sharon Chung, D-Bloomington, filed House Bill 4736 last March, after her previous version of the Family Farm Preservation Act failed to advance in 2025.
Gov. J.B. Pritzker addressed the issue when he spoke at the Illinois Agricultural Legislative Roundtable in August.
“We ought to change the estate tax in the state of Illinois and I am going to support in this session and have been supporting the Family Farm Preservation Act,” Pritzker said.
The Illinois Freedom Caucus urged support for the legislation, calling it a rare opportunity to come together “on a common sense, pro-taxpayer reform.”
The Center Square asked Freedom Caucus member and state Rep. Adam Niemerg, R-Dieterich, if he thought the bill might pass during fall veto session.
“I really, really hope that it can. Unfortunately, the Democrats, they keep talking about this issue and promising movement on it, but when the rubber meets the road, it never seems to happen,” Niemerg said.
Raney said there is broad support from both parties, but the state has budget pressures.
“Because this at the end of the day will decrease revenue by a little bit to the state, because it is a tax reform,” Raney said.
The estate tax generated $68 million last month from all Illinoisans, not just farmers.
Niemerg said the estate tax also affects small businesses.
“We have some of the highest taxes in the country, and it’s about time we started helping some folks out,” Niemerg said.
Last year, the federal government raised its estate and gift tax exclusion amount to $15 million for calendar year 2026.
Raney said Illinois has not changed its estate tax in almost 15 years.
