Are 457(b) retirement withdrawals/income taxable in illinois?

[PhilK2]

• I was reviewing Illinois publication 120 (https://tax.illinois.gov/content/dam/soi/en/web/tax/research/publications/pubs/documents/pub-120.pdf).
  
• Specifically, I looked at page 2 "General Information."
  
• Under that, the first bullet under "What retirement income may I subtract on Form IL-1040, Line 5, and where is it reported on my federal return?" says "a qualified employee benefit plan including 401(k) plans reported on your U.S. 1040 or 1040-SR, Line 5b. Note: A qualified employee benefit plan is defined in IRC Sections 402 through 408."
• I believe they omitted section 457(b)
• I think the above because when referring to page 17 of "2024 Instructions for Forms 1099-R and 5498" under section D, it defines "qualified" to include IRC section 457(b).
• I have also read in many places, such as https://cms.illinois.gov/benefits/deferred/deferredcompensation.html, that it is not taxed by the state of Illinois if you are a state employee.
• Given the above, I am assuming it is universally (including city and county employees) not taxed by the state of Illinois.

In summary, I am looking for an authoritative source that either proves or disproves that Internal Revenue Code 457(b) is either taxable or not taxable by the state of Illinois.

[DianeW777]

Yes, you are correct. If you are taking distribution from your 457(b) plan for retirement it will not be taxed on the Illinois (IL) state return.

• Once distributions begin, the distributed monies are fully taxable as ordinary income for federal tax purposes. The funds are never taxed by the State of Illinois.
  • State of IL Deferred Compensation Plan