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nh05
Returning Member

Retirement Withdrawal Tax in Illinois

Hello and thank you in advance for your help!

 

I lived in Illinois until September 2021 and made a traditional 403b retirement withdrawal in August before my move to Indiana in September.  Illinois does not tax retirement withdrawals.  I am now completing my STATE taxes for Illinois and TurboTax is asking how much I took out of my 403b and how much I received in SS payments while a resident of Illinois.  When I enter those numbers, both are being taxed in TurboTax even though I received all of this income while a resident in a State that does not tax retirement.  Is this an error?  I was taxed on this money on my federal return, which I expected.  

 

Thank you!

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2 Replies
ErnieS0
Expert Alumni

Retirement Withdrawal Tax in Illinois

There is a screen in Illinois titled Pension Distributions asking how much of your 403(b) is exempt from state tax.

 

TurboTax will carry over the whole amount and ask if that is correct. Did you see that screen?

 

This is the CD/Download screen. I don't know whether you are using that or TurboTax Online.

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nh05
Returning Member

Retirement Withdrawal Tax in Illinois

This answers my question. I did not progress beyond that screen. It was showing that Illinois was taxing retirement income. The next screen corrected the issue. Thank you so much, Ernie! 

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