- I was reviewing Illinois publication 120 (https://tax.illinois.gov/content/dam/soi/en/web/tax/research/publications/pubs/documents/pub-120.pdf).
- Specifically, I looked at page 2 "General Information."
- Under that, the first bullet under "What retirement income may I subtract on Form IL-1040, Line 5, and where is it reported on my federal return?" says "a qualified employee benefit plan including 401(k) plans reported on your U.S. 1040 or 1040-SR, Line 5b. Note: A qualified employee benefit plan is defined in IRC Sections 402 through 408."
- I believe they omitted section 457(b)
- I think the above because when referring to page 17 of "2024 Instructions for Forms 1099-R and 5498" under section D, it defines "qualified" to include IRC section 457(b).
- I have also read in many places, such as https://cms.illinois.gov/benefits/deferred/deferredcompensation.html, that it is not taxed by the state of Illinois if you are a state employee.
- Given the above, I am assuming it is universally (including city and county employees) not taxed by the state of Illinois.
In summary, I am looking for an authoritative source that either proves or disproves that Internal Revenue Code 457(b) is either taxable or not taxable by the state of Illinois.
