IL HB2677

Increases the Illinois estate tax exemption from $4,000,000 to $6,000,000 for estates containing qualified farm property, with annual adjustments based on the Consumer Price Index starting January 1, 2026

Allows surviving spouses to claim a "deceased spousal unused exemption amount" if the last deceased spouse died within 24 months prior to the bill's effective date, with the unused exemption indexed for inflation

Creates a special use valuation for qualified farm property that removes federal limitations on the reduction in fair market value under Internal Revenue Code Section 2032A

Expands the definition of "qualified heir" to include any lineal descendant of a grandparent of the decedent (including adopted persons) and their spouses, broadening eligibility for farm property transfers

Permits Illinois estate tax elections for farm property special use valuation that are separate and independent from federal estate tax elections