Illinois Adjustments

Article ID: 60111  

What Are Some Examples of Retirement Income That is Not Taxable in Illinois?


Federally taxed Social Security benefits and certain retirement plans are not taxable to IL.  You may subtract most retirement income if it is included in Form IL-1040, Line 1. This includes income from:

  • Qualified employee benefit plans (including railroad retirement and 401(K) plans)

  • Individual Retirement Accounts or self-employed retirement plans

  • Social Security and railroad retirement benefits

  • Government retirement and government disability plans and group term life insurance premiums paid by a qualified retirement plan

  • State or local government deferred compensation plans

  • Certain Capital gains on employer securities

  • Certain Retirement payments made directly to retired partners

NOTE: Your beneficiary share of payments from certain retirement plans and retirement payments to retired partners reported on Schedule K-1-T should not be included on Line 5. For more information, see the Schedule M instructions. For more information, see Publication 120.

NOTE: Your distributive share of federally tax-exempt interest and dividend income received from a partnership, S corporation, trust, or estate is added back on Schedule M, Line 2.


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