Early pension distributions and state of Illinois taxes?
I took an early pension distribution last year from a pension account from a former job. It was not rolled over to another account.
I saved enough of the distribution to easily pay the penalty and taxes on my Federal return. I also held out 3% towards state tax in Illinois.
TurboTax tells me that I do not owe any state tax on this distribution. (Actually, it tells me the distribution has been deducted for figuring my Illinois income tax return.) I live in Illinois. I am well under 50 years old, and do not and have not owned a business personally, if either of those are germane. I do have a job, and state income tax was withheld correctly for that job.
Is TurboTax correct?
I am looking for sourced answers, or answers from accountants or other tax professionals who can tell me where in the State of Illinois tax code is the basis of the answer. No best guessed answers, please.
- Brian JLv 51 decade agoBest Answer
Your answer is detailed in the Illinois Department of Revenue
2007 Form IL-1040 Instructions, page 6 (for Line 5 of your Illinois tax form):
Federally taxed Social Security benefits and certain
retirement plans --> You may subtract most retirement income if it is included in Form IL-1040, Line 1.
--> See explanatory details at either/both of the sources below.Source(s): http://tax.illinois.gov/TaxForms/Incm2007/Individu... http://tax.illinois.gov/Publications/Pubs/Pub-120....