No, your US Treasuries Accrued Market Discount would not be a subtraction for Illinois.
Please see 2019 Illinois IL-1040 Schedule M Additions and Subtractions Instructions page 3 quoted below:
Line 22 — U.S. Treasury bonds, bills, notes, savings bonds, and U.S. agency interest
Enter the income included in your Form IL-1040, Line 1, you received from U.S. Treasury bonds, bills, notes, savings bonds, U.S. agency interest, and other similar obligations from your
- federal Form 1040 or 1040-SR, or
- mutual fund statement plus
any income listed in Publication 101, Income Exempt from Tax, under
- “What if I have income from obligations of the United States Government?”
- “What federally-taxable income is exempt from Illinois Income Tax by other federal statutes?”
- “What if I have distributions from money market trusts (mutual funds)?”
Mutual fund distributions
Include the entire amount of federally taxed distributions received from mutual funds investing exclusively in U.S. government obligations. If the mutual fund invests in U.S. government obligations and non-exempt obligations, your deduction is the distribution received from the mutual fund attributable to the U.S. government obligations, as determined by the mutual fund. If the mutual fund does not provide this percentage amount, multiply the total distribution by a fraction.
The numerator is the amount invested by the fund in exempt U.S. government obligations, and the denominator is the fund’s total investment.
- This subtraction is the amount net of any related bond premium amortization.
- Savings bond interest that is not included in your federal adjusted gross income is not an allowable subtraction.
- Do not include your distributive share of a subtraction for U.S. government obligations from a partnership, an S corporation, a trust, or an estate on this line. Your distributive share of subtractions should be included on Line 14 of this schedule.
