SERP Federal vs State wages

[S T]

SERP is a "supplemental executive retirement plan"

Here is my question, if anyone knows the answer

We received a W2C correction for Federal Wages, ( reducing by the SERP) reflected in Box 11, however, the employer is stating it does not affect the State wages --- State is Illinois

Does this sound correct?

Thanks

Sandy

[buzzardbreath]

Probably True Sandy

I would say this is probably true, although some of our Illinois members might give us better information.

State income, exemptions, deductions, deferrals, etc. vary widely from state to state and often with the Federal Code. In particular when it comes to deferrals for retirements. This is because in so many cases, when an individual begins to have retirement income, it is exempt for state tax purposes. In fact, in some cases a supreme court ruling forbids state taxation of retirement earned in a different state.

Since they are having to forego taxation of retirement benefits in many situations, states often retaliate by disallowing deferrals to retirement plans that are otherwise allowed by federal.

You can probably read the Illinois instructions, particularly the pages that describe "additions and subtractions from Federal AGI".

[mastertaxguy]

Illinois taxation of serp payments

There is a decision of the Illinois Department of Revenue Office of Administrative hearings from August, 2010 upholding these benefits being subject to Illinois income tax. (09-IT-0000). This decision (are they always titled Jane and John Doe?) dealt with non-residents.