Questions & Answers

What types of income don't qualify for the Illinois retirement subtraction?

It is rare, but some federally taxed retirement income can't be subtracted on your Illinois tax return. The following types of income do not qualify for the Illinois retirement subtraction:

  • Third-party sick pay.
  • Deferred compensation or disability income not from a government plan.
  • Any retirement income for which you elected to use the "Special 10-Year Averaging Method" on federal Form 4972.

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