Inheritance and Illinois taxes

[N02L84ER]

I am trying to decide what is actually going to be taxable in Illinois from my spouse's inheritance in 2020 so that I can make my estimated payment by the 15th. Our normal IL tax situation is so simple that I have never had to purchase a state Turbo Tax so I cannot use a previous year's version and I do not know when he will get his 1099s or whatever they will mail to him. I guess I could purchase this year's with the state if no one has any information that would help. Anyway, he was paid around
1. $1000 from Social Security since his mother's bank returned her last deposit. Normally SS is not taxed I think. We are both under 62 and have never had to worry about this before. Will IL tax the $1000?

2. $5000 as the death benefit on her teacher pension. I think pensions are not taxed but have no idea about death benefits. Neither of us have pensions so this is also new ground for us. Will IL tax the $5000?
Thanks for any guidance.

[GenXguy]

I'm from IL and had to deal with inheritance before, but not those specifically. Since IL does not tax SS distributions or retirement income, I would not expect you to owe tax on any of that. But, I am not going to say anything 100% since I didn't have to deal with that.

[RE2Boys]

If her mother was receiving social security, it would be reported on her mother's final income tax return, not yours. The executor or administrator of her estate would be responsible for filing the mother's final income tax returns.

Who was the check for the %5K death benefit made out to? Most likely the designated beneficiary. That person will most likely receive a 1099R and include that as income on their tax returns.

[Sunset]

IL does not tax SS nor Pension, nor retirement account withdrawals (IRA, 401K, etc).

The estate will need to do a tax return, so look at deceased previous return for ideas of what income existed, noting that SS will be super low this year.

[rk911]

IL does not tax any sort of retirement income...yet.

[N02L84ER]

Thanks all. I think I am good now.

[EastWest Gal]

One thing more. I think a death benefit from a pension is essentially like life insurance. I don't think it is taxable, by either the beneficiary or the estate. You should be able to easily investigate this though.

[Love This Community]

Quote:

Originally Posted by rk911 IL does not tax any sort of retirement income...yet.

Still not able to attract / retain retirees. I guess after so many years in the cold weather, people are looking for warmer places to retire. I love the....yet part.

[VanWinkle]

Quote:

Originally Posted by Love This Community Still not able to attract / retain retirees. I guess after so many years in the cold weather, people are looking for warmer places to retire. I love the....yet part.

They don't tax retirees, but they tax the retirees house to the max!!!

[Love This Community]

Quote:

Originally Posted by VanWinkle They don't tax retirees, but they tax the retirees house to the max!!!

Property taxes are insane. I pay more in taxes on our single family property than I used to as a renter for a condo. Lifestyle creep is real and even more painful in IL in the form of property taxes.

[NoiseBoy]

I am dealing with my father's estate in Illinois as we speak. I happen to have legal insurance through an employer plan, so we are using an attorney to help us probate Dad's will. My sister and I received payments from Dad's VA life insurance in 2020, so I asked this question of our attorney and he said, "...life insurance death benefits are essentially gifts/inheritance and not income for your reporting purposes."

[Sangiovese]

Quote:

Originally Posted by rk911 IL does not tax any sort of retirement income...yet.

With an emphasis on "yet". With this state's sad fiscal situation, they will surely tax everything soon.