Ask Terry Questions Illinois taxation of retirement accounts

Illinois taxation of retirement accounts

By Terry Savage on February 13, 2020 |

Terry, Have you heard anything about Illinois beginning to tax retirement account withdrawals? Is there any pending legislation pertaining to it?

Terry Says

My guess is that’s next on the agenda — because Illinois desperately needs to find money to pay its pension promises. It was an “offer” made by Chicago mayor Lori Lightfoot at the start of her term — to support that kind of tax on retirement withdrawals (which are currently free from state income tax) if the governor would give more money to the city schools.
I haven’t seen another such proposal — and that one died away. But it’s a good bet that’s on the horizon. Just one more reason that Illinois has nearly the largest number of people leaving the state!

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