How can I deduct federally taxed, foreign pension from state return?

[IL1225]

It is not taxable income, so I would like to deduct that amount.

[DaveF1006]

To clarify, what state?

[IL1225]

Thank you for your attention. It is Illinois.

[DaveF1006]

It depends how you reported the distribution of the foreign pension.  If you reported it as a 1099R, here will be a follow up screen asking you which state you live in, here you will check Illinois.

If you entered your income under less common income>miscellaneous income, there is a different procedure. When you prepare your Illinois state return, you will come to a section entitled Here is the income Illinois handles differently. Look for retirement income and then retirement income deduction. Here is where you would exclude the pension. 

Don't get confused by the wording in the program.  This is where you will enter it so you won't get taxed on the income.

[IL1225]

Thank you for your detailed explanation.

"Don't get confused by the wording of the program" >>> Do you mean ignore "W-2" wording below?

My retirement benefit payor (foreign government) does not issue Form 1099*R. It is not on W-2.

May I still enter the number here?

Other retirement distributions

Illinois allows a deduction for other government retirement plan distributions reported on W-2's, such as excess benefit fund payments. (This is not common.)

If you received this type of payments, enter the amount below.

Other Government Retirement Distributions Reported on W-2's

[DaveF1006]

Yes, you may enter the information from the 1099R instead of the W2 so you may get your retirement deduction for the State of Illinois.

[IL1225]

Thank you. I will follow this method and finish up 2024 returns!