House bill would shield retirement income from taxation

A proposed amendment to the Illinois Constitution would render residents’ retirement earnings off limits for Springfield.

Illinois retirees could soon be granted new protections from the state income tax under a recent proposal in the Illinois House of Representatives.

House Joint Resolution Constitutional Amendment 44, filed April 17 by state Rep. Allen Skillicorn, R-East Dundee, would modify the Illinois Constitution to explicitly prohibit Springfield from making retirement income subject to taxation.

The proposal would amend the state Constitution’s revenue article, establishing that the state’s income tax “does not include retirement income,” further mandating that “there shall be no such tax imposed by the State” that reaches the income of retirees.

While the state does not currently collect taxes on private or public retirement income, the increasingly precarious condition of Illinois’ finances has led some to eye Illinoisans’ retirement income as a possible source of tax revenue.

Skillicorn’s constitutional amendment would block those efforts.

In March, the Civic Federation estimated Illinois could generate an additional $2.7 billion in revenue by tapping the incomes of retirees.

The East Dundee representative is also the chief sponsor of House Joint Resolution Constitutional Amendment 38, a spending cap that would tie state spending to Illinois’ economic growth. Whether HJRCA 44 or HJRCA 38 advance to a substantive committee for a vote remains to be determined by the House Rules Committee, where both proposals currently reside.