Retirees getting the 5% IL income tax?


Retirees may start to “feel” the tax pain with the rest of us.  The Chicago Tribune reported that John Cullerton (D-Chicago), IL Senate President, suggested that retirement income be taxed at the new 5% rate.  Currently, retirement income such as pension funds, social security and 401(k) distributions are not taxed in Illinois.  If Cullerton succeeds retirees would experience an immediate 5% tax hike, much more painful than the 2% increase of the general population.  He says that this measure would bring in $1.6 billion a year to state revenues, but critics say this will just cause more seniors to move to Florida or other no-income-tax states.

http://www.chicagotribune.com/news/local/ct-met-illinois-retirement-income-tax20110307,0,141510.story