in [Event] Ask the Experts: Tax Law Changes - One Big Beautiful Bill
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TurboTax starts IL State tax by transferring 1040 line 11 as state taxable income which also includes the entire Roth conversion. Then it deducts only the TAXABLE portion of Roth conversion, leaving the nontaxable portion in. So I will have to pay state tax on that nontaxable Roth conversion. My understanding is that State of IL does not tax retirement account distribution at all, regardless if it is federal taxable or not. Does anyone else run into similar issue?
I called TurboTax help and didn't get any help at all. In fact the rep just hung up even before she understood what my question is, let alone providing any help. I am posting here in hope that TurboTax will see my question and help
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To confirm, you made a Roth conversion but had made nondeductible contributions and therefore your conversion was partly nontaxable? If yes, then only the taxable part would be included in line 11 of Form 1040 since only the taxable part is entered on line 4b and added up as income. Therefore, it would be correct that in the IL state return only the taxable part gets deducted.
Yes, my conversion is partly nontaxable. You are absolutely correct that the nontaxable conversion is not included in 1040 line 11. My numbers were wrong. Thank you for your timely response!
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