No, IL does not tax Social Security benefits and certain retirement plans.
Per the IL-1040 instructions for Line #5 http://tax.illinois.gov/TaxForms/IncmCurrentYear/Individual/IL-1040-Instr.pdf, deduct federally taxable social security benefits and certain retirement plans that are entered :
Enter the amount of federally taxed:
- Social Security and retirement
income included in your adjusted gross income on Form IL-1040,
Line 1 that you received from
qualified employee benefit plans (including railroad retirement
and 401(K) plans) reported on federal Form 1040, Line 16b, or
Form 1040A, Line 12b.
- Individual Retirement Accounts or self-employed retirement
plans reported on federal Form 1040, Line 15b, or Form 1040A,
Line 11b.
- Social Security and railroad retirement benefits reported on
federal Form 1040, Line 20b, or Form 1040A, Line 14b.
- government retirement and government disability plans
and group term life insurance premiums paid by a qualified
retirement plan reported as wages on your federal Form 1040 or
1040A, Line 7.
- state or local government deferred compensation plans
reported on federal Form 1040, Line 7 or 16b, or Form 1040A,
Line 7 or 12b.
- certain capital gains on employer securities reported on federal
Form 1040, Line 13.
- certain retirement payments made directly to retired partners
reported on federal Form 1040, Line 17.
See the screenshot below.
