Social Security income is not taxable in Illinois – see http://www.revenue.state.il.us/Individuals/pension.htm - so TurboTax automatically removed it from Illinois income.

But note that retirement income in general is not taxable in Illinois. You are allowed to deduct most retirement income you reported on your federal return with the exception of deferred compensation and disability payments from non-governmental plans, including non-qualified annuity distributions and third party sick pay.

This means that you need to go through the Illinois interview to see if the other annuity payment is not taxable either.

In the interview, you will see a screen entitled "Social Security Income Deduction". Your Social Security amount from the federal return should already be here. If so, don't change anything.

The next screen is "Pension Distributions". Note the comment: "Illinois allows a deduction for pension distributions received from a government retirement plan (such as State Employees Retirement System, State Universities Retirement System, Teachers Retirement System, Illinois Municipal Retirement System), a qualified employee benefit plan including 401(k) and 403(b), or a state or local government deferred compensation plan (457)."

If your annuity was reported on a 1099-R as not an IRA and if you indicated in the 1099-R interview that this was a qualified plan, then the amount from your annuity will probably already be here. If so, do not change anything.

But if the amount is not there, you may want to call your annuity plan administrator to see if this plan qualifies for exclusion under Illinois law. If so, you can add it to the box in the Pension Distributions" screen.

My annuity income reported on 1099-R didn't transfer over to my Illinois return either.  This is confusing since the software only addresses pensions and not annuities.  I will report my annuity income as you advised in the previous question.

Social Security income is not taxable in Illinois - not true!

Up to 85% of a taxpayer's benefits may be taxable if they are:

• Filing single, head of household or qualifying widow or widower with more than $34,000 income.
• Married filing jointly with more than $44,000 income.
• Married filing separately and lived apart from their spouse for all of 2021 with more than $34,000 income.
• Married filing separately and lived with their spouse at any time during 2021.
• https://www.irs.gov/newsroom/irs-reminds-taxpayers-their-social-security-benefits-may-be-taxable

@RLMcfox -  there is federal income tax and state income tax.  

 

yes, for federal income tax purposes, up to 85% of social security can be considered taxable income.

 

but if you are filing Illinois state tax, the taxable social security from the federal return is eliminated from the state return, i.e. the State of Illinoit does not tax your social security income. 

@RLMcfox 

 

The state of Illinois does not tax retirement income.   Your pension, Social Security, or retirement account distributions are not taxable in IL.   Retirement income is taxable on your federal return, so you have to enter it all when you prepare your federal Form 1040.  But the software will follow the tax laws and put the pertinent income information on your state return.   Your retirement income will not go on the IL form

States that tax Social Security benefits:

CO, CT, KS, MN, MO, MT, NB, NM, ND, RI, UT, VT, WV

These states offer varying degrees of income exemptions, but four mirror the federal tax schedule: MN, ND,VT, and WV