Turbotax says that I owe the state of Illinois for retirement income that I received. The Illinois Retirement System did not deduct any taxes. What did I do wrong?

coachpi · ‎June 5, 2019

In teh past I ave never had taxes withheld or paid any state taxes. This year the software says I owe $7000+ since none was deducted. Can't be right.

IsabellaG · ‎June 5, 2019

You're right. The state of Illinois doesn't tax most retirement distributions. Go back through your entries in the Federal section for your 1099-R, and make sure that you entered your distribution correctly. Then go to your IL return. See the screen Here's the income that Illinois handles differently, and see the Retirement Income Deduction.

Your retirement income should be subtracted automatically.

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View solution in original post

IsabellaG · ‎June 5, 2019

You're right. The state of Illinois doesn't tax most retirement distributions. Go back through your entries in the Federal section for your 1099-R, and make sure that you entered your distribution correctly. Then go to your IL return. See the screen Here's the income that Illinois handles differently, and see the Retirement Income Deduction.

Your retirement income should be subtracted automatically.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

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Turbotax says that I owe the state of Illinois for retirement income that I received. The Illinois Retirement System did not deduct any taxes. What did I do wrong?