baumgrenze wrote:

- quote -

Pensions are not taxable in Illinois.

Missy Doyle

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I now consider this a closed question!

IDOR responded with a simple statement, "Illinois does not
tax annuities."

I received a similar, more detailed answer in "Tax
Strategies" forum at www.fool.com.

I thought I'd document my findings against a future question
by someone else.

Thanks for looking.

baumgrenze

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

"baumgrenze" <baumgrenze[at]yahoo.com> wrote:

- quote -

About 10 years ago (my memory is not exact and I can't take
the time to look it up now) Congress wrote a provision into
the law that states could not tax pensions based on source.
They could tax the pensions of their residents but not of
residents of other states. Even it the pensioner earned
some or all of the pension while working in a state, that
state can not tax the pension if the person no longer lives
there. So, Illinois has no power to tax you on the payments
you receive if you are not an Illinois resident.

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans

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I was amazed to find this statement in the instructions for
"Column B Illinois Portion" of the 2005 Schedule NR for the
State of Illinois.

Line 16: Taxable pensions and annuities Do not write an
amount on this line. As a nonresident, your pensions and
annuities are not taxed by Illinois.

I was named a 1/3 beneficiary of a $10,000 (cost) fixed
retirement annuity issued by IDS Life and purchased by a now
deceased lifelong Illinois resident. My share was $7,542.47,
of which, clearly, $3,333.33 was invested capital and
$4,209.14 was tax sheltered income, accumulated during the
life of the purchaser (not me.) The income was reported to
me on a 1099-R.

For federal purposes I reported the income portion on line
16b of my Form 1040, along with a small pension paid to me
by a former employer.

Given past experience with IDOR I am amazed that they would
not wish to collect their 3% of this income

Has anyone had experience with this instruction? Is it as
simple as it seems? Do I really not owe a tax?

Thanks,

baumgrenze

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >