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    pjasper's Avatar
    pjasper Posts: 1, Reputation: 1
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    #1

    Jun 29, 2012, 07:18 AM
    Do you pay state tax on inheritance from teachers pension
    A friend inherited about 11000 from Mom. Teachers pension and IRS did not tax this and now the State is. They seemed not to be sure on it. Does he have to pay taxes on this. If the IRS did not tax it, why did the state? Can anyone help me? It is for the State of Illinois and the City of Chicago. Thank you in advance.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #2

    Jun 29, 2012, 07:25 AM
    The federal government does NOT have an inheritance tax, and the amount cited is WAY too low for the federal estate tax. Illinois also has an estate tax that starts with estate in the million dollar range

    However, it appears that you are being subjected to an inheritance tax, which is a tax paid by the heirs; the estate tax is paid by the estate BEFORE the heirs get any proceed from the decedent's estate.

    Your friend needs to get local professional tax help on this issue.
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