Illinois Gives Income Tax Breaks to the Retired

 Posted on December 00, 0000 in Family Law

While Illinois income taxes ranked high among the states in general, Illinois does offer income tax breaks for those who are retired.

Illinois does not assess state income tax on Social Security benefits. As a side note Alabama, Hawaii, Louisiana, Massachusetts, Michigan, Mississippi, New York, Pennsylvania all exclude Social Security benefits from their state taxes.

Illinois does not assess state income tax on military pensions, in-state pensions, and many private pensions.

In particular, Qualified Employee Benefit Plans including 401 K plans, IRA plans, railroad retirement benefits, state and local deferred compensation plans are exempt from Illinois State income tax.

So, you may ask: is Illinois a good place to retire? For the present it seems to be, but the answer depends upon how long you want to stay retired in Illinois.

Illinois has many unfunded government pensions. This means that the State of Illinois figured out more ways to receive income taxes from Illinois residents. So, the future is unknown.

For questions about your tax status as a retired Illinois resident, contact a knowledgeable Illinois attorney at 630-920-8855.

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