Illinois
Surprisingly, while Illinois has a pretty good retirement income tax policy when compared to the other Midwest states, it is also one of the least friendly for retirees when we talk about taxes as a whole. Despite this, they will not be taxing your IRA, pension, 401(k), or social security benefit payments at all, except in the cases when the pension or 401(k) is not coming from an employee benefit plan.
Otherwise, Illinois has a flat rate tax on their income of 4.95%, which is still fairly low when compared to other states, and the only time they perceive estate taxes is for those that go over a perceived value of $4 million.
It may not be the best choice for someone that’s moving in order to lessen the tax burden, but if you have been living here all your life, we see no reason for which you would want to move when it comes to retirement income tax.
9 Responses
So much more needs to be considered when deciding where to retire. I have noticed a huge disparity in property taxes from state to state & sometimes towns or counties within the state. Maybe you’re not being taxed on retirement income but would pay a premium on property taxes & medical expenses etc. For example, Florida has no income tax but their property taxes are quite high as are condo dues if you’re living in an HOA. Do your research!
So, if the only income you’ve only received in 2022 was income for SNAP food services, must that be an actual income?
This would be a good article if a person did not have to click through page after page. This all could have fit on one page.
Wow…Texas?
Very very high real estate taxes
thanks for the information it is very useful
What about Kansas?
I thought Florida was one of the states that didn’t tax seniors
Good to know.