turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

Illinois 1099-R Life Insurance

I have 1099-R with code 7 in box 7 for Normal Distribution from Northwestern Mutual Insurance. We had a loan against the Life insurance policy and it lapsed so they sent us the 1099-R. Is this taxable or exempt from Illinois income? 

x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

1 Best answer

Accepted Solutions

Illinois 1099-R Life Insurance

it is not a retirement distribution so it is taxable in Illinois. 

 

 

only the following is exempt

Line 27 — Payment of life insurance, endowment, or annuity benefits received. Enter the amount of payment of life insurance, endowment, or annuity benefits received before the time they would have ordinarily
been paid as an indemnity for a terminal illness. .

 

 

 

items exempt are listed in PUB 101

https://tax.illinois.gov/content/dam/soi/en/web/tax/research/publications/pubs/documents/pub-101.pdf 

View solution in original post

3 Replies
MarilynG1
Expert Alumni

Illinois 1099-R Life Insurance

The income reported on your 1099-R with Code 7 is normally taxable income, reported on your Federal return. 

 

A 1099-R reporting a distribution for a lapsed insurance loan usually has Code L in Box 7 and is taxable income. 

 

Illinois allows you to exclude most retirement income reported on your Federal return in the state interview, so your 1099-R may not be taxable.

 

Here's more info on Is Life Insurance Taxable?

 

 

 

 

 

 

 

 

 

 

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

Illinois 1099-R Life Insurance

The "state interview" in TurboTax was not clear. It left the amount blank when it asked for any amounts to enter that could be exempt. But I thought TurboTax would have pre-filled in the amount if it knew it was exempt in Illinois.  I should assume it's not exempt? ... I'm looking for a definitive answer whether or not this is taxable in Illlinois. 

 

Any answers?

Illinois 1099-R Life Insurance

it is not a retirement distribution so it is taxable in Illinois. 

 

 

only the following is exempt

Line 27 — Payment of life insurance, endowment, or annuity benefits received. Enter the amount of payment of life insurance, endowment, or annuity benefits received before the time they would have ordinarily
been paid as an indemnity for a terminal illness. .

 

 

 

items exempt are listed in PUB 101

https://tax.illinois.gov/content/dam/soi/en/web/tax/research/publications/pubs/documents/pub-101.pdf 

message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question
Manage cookies