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State Taxation of Retirement Income

According to the Illinois Department of Revenue, Illinois does not tax distributions received from a number of retirement plans. Publication 120, Retirement Income lists the following retirement income as exempt from Illinois state taxes:

  • A qualified employee benefit plan (403b)
  • Railroad retirement income
  • An Individual Retirement Account (IRA)
  • Social Security benefits
  • Government retirement or disability plan (SURS, SERS, TRS, IMRF, et al)
  • State or local governmental deferred compensation plan (457)
  • Retirement payment to retired partners

Although the above are not subject to Illinois state income tax, they may be subject to other state taxes if you are residing in another state. To find out if your pension is subject to state tax and how your pension income must be reported on your state income tax return, please check with that state's Department of Revenue.

This information is provided with the understanding that it is a source of information and does not constitute legal, tax, or other professional advice. If legal advice or other professional assistance is required, the services of a professional advisor should be sought.


Maintained by University Human Resources | Contact Information | Last Update: 09-January-2018 | ID: 3634