Do I have to pay Illinois state taxes on net realized gain from the sale of stock if I am exempt for federal tax because I am in the 10-15% tax bracket?

[robclodfelter]

If I received a net realized gain on the sale of my stock (3 of which are dividend paying stocks), and I fall into the 10-15% tax bracket, will I also be exempt from Illinois state taxes? Do I need to report these gains on the Illinois Tax Form? 

[DDollar]

Yes, you will have to pay Illinois income tax on the gains.  Even though they are taxed at 0%, the gains are included in your Adjusted Gross Income (AGI).  Your federal AGI is used as the basis for determining your Illinois taxable income.  Illinois does tax capital gains differently than other income.   

[robclodfelter]

Thank you. Will I need to report this gain on a separate line on the Illinois tax form 1040 or is the AGI from the federal form sufficient? Or do I need to indicate this gain elsewhere on the form?

[DDollar]

You should not need to do anything.  The gain will be included in your federal AGI and that will flow through to Line 1 of your IL 1040.

[robclodfelter]

Thank you so much!

[DDollar]

You're welcome.  Thanks for using TurboTax!

[robclodfelter]

I'm sorry but I do have one more question. I did not have any income in 2016 other than the capital gains on the sale of my stock. The amount was only around $160. Do I still need to file a federal tax return and/or a state return? I assume that my AGI would be $160 since I wouldn't be paying any taxes on the gains. But would I still have to file the federal return to show that I sold stock and would that mean that I would have to file a state return as well?