All Things Tax

All Things Tax

Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.

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Pioneer
Posts: 1
Registered: ‎10-11-2017

Illinois income tax for backdoor roth conversion

Can someone verify that backdoor conversion to Roth IRA from pretax  trad or rollover IRA

does not incur any Illinois state income tax (since this is a distribution like RMD, which

is not taxed).  Of course, one need to pay Federal income tax (such funds are

treated at the same tax level as wages, I believe --for Fed tax purposes)  Thanks

Tax Pro
Posts: 5,615
Registered: ‎02-23-2016

Re: Illinois income tax for backdoor roth conversion

Hi jky1944,

 

 

Welcome to the H&R Block community.

 

Illinois does not tax retirement income whatsoever, whether it be a conversion distribution or a minimum required distribution.  It has been this way since 2011.  In order to take the exemption on your Illinois return all you have to do is adjust your federal income on the Illinois return.  Below is some additional information for your state.

 

"Illinois does not tax income from retirement plans. It doesn’t tax withdrawals from IRAs. The state doesn’t tax rollovers from a traditional IRA to a Roth IRA. It also doesn’t tax income from retirement annuities, 401(k) plans, 403(b) plans, 457 programs, retirement plans for self-employed people, government/military Thrift Savings Plans, railroad retirement benefits, Social Security, federal retirement savings bonds or pensions."

 

If you have any other questions I'll be glad to help.

 

Louis,

Senior Tax Advisor (Tampa, FL)