My husband inherited a qualified annuity from an insurance company in 2023. We took it out in full and received a 1099R. I know it is subject to federal taxes, but is it subject to IL income tax? Turbo tax is putting it as non-taxable (lumping it as a pension or IRA distribution), but we think it is taxable. We think we should change the amount to $0 in the step by step question where it takes it as a deduction to income. Any input would be appreciated. Thank you.
Yes, it is taxable to Illinois residents. it depends how you entered this into the program. Did you enter this as a qualified plan when it asked the question? If you said yes, then the program thinks this is a qualified retirement pension that is not taxable to the state of Illinois. Switch your choice to non-qualified and see if this will make the difference because an amount from a life insurance settlement is non-qualified.
I tested this into my own program and it worked. The amount was reflected correctly in Box 1 of the Illinois 1040. let me know if this works.
Yes, it is taxable to Illinois residents. it depends how you entered this into the program. Did you enter this as a qualified plan when it asked the question? If you said yes, then the program thinks this is a qualified retirement pension that is not taxable to the state of Illinois. Switch your choice to non-qualified and see if this will make the difference because an amount from a life insurance settlement is non-qualified.
I tested this into my own program and it worked. The amount was reflected correctly in Box 1 of the Illinois 1040. let me know if this works.