No, Illinois does not tax retirement income. Illinois does not tax distributions received from: qualified employee benefit plans, including 401(K) plans; an Individual Retirement Account, (IRA) or a self-employed retirement plan; a traditional IRA that has been converted to a Roth IRA; the redemption of U.S. retirement bonds; state and local government deferred compensation plans; a government retirement or government disability plan, including military plans; railroad retirement income; retirement payments to retired partners; a lump sum distribution of appreciated employer securities; and the federally taxed portion of Social Security benefits if the income is included in your federal adjusted gross income on Form IL-1040, Line 1. IL Retirement

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Are required minimum deductions taxed by Illinois?

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February 23, 2022
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ColeenD3

No, Illinois does not tax retirement income.

Illinois does not tax distributions received from:

qualified employee benefit plans, including 401(K) plans;
an Individual Retirement Account, (IRA) or a self-employed retirement plan;
a traditional IRA that has been converted to a Roth IRA;
the redemption of U.S. retirement bonds;
state and local government deferred compensation plans;
a government retirement or government disability plan, including military plans;
railroad retirement income;
retirement payments to retired partners;
a lump sum distribution of appreciated employer securities; and
the federally taxed portion of Social Security benefits

if the income is included in your federal adjusted gross income on Form IL-1040, Line 1.

IL Retirement