Updated July 28, 2026. Quick answer: No. Illinois is the clearest case in the country: its retirement-income subtraction names IRA distributions including conversions, so the converted amount comes back out of state taxable income.
Why a conversion is a different question from a withdrawal
Almost every state summary answers “how does Illinois tax retirement income?” That is a question about distributions. A Roth conversion is not a distribution in the ordinary sense — it is a voluntary election to recognise income now in exchange for tax-free growth later. Whether a state’s retirement exclusion reaches that election is a separate question, and it is the one that decides your bill.
Most states leave you to infer whether a conversion counts. Illinois does not — the authority reaches conversions on its face. That removes the ambiguity that makes this question hard almost everywhere else.
What Illinois does with the converted amount
State income tax: flat 4.95%
How Illinois treats IRA and plan income: Fully exempt: all federally taxed retirement income is subtracted — qualified employer plans (401(k), 403(b), 457), traditional IRA distributions (including Roth conversions), private and government pensions, railroad retirement. IL-1040 Line 5; IDOR Publication 120.
What to ask a preparer about Illinois
Confirm the subtraction is claimed on the return for the conversion year — it is not automatic on the federal figure.
Converting around a move
Converting after establishing residency in Illinois is the whole play. People moving here from a taxing state sometimes convert before the move and pay a state bill they could have avoided entirely by waiting.
Four separate taxes change when you move, not one: income tax on withdrawals, treatment of Social Security, estate tax, and inheritance tax. A state that looks good on conversions can be worse on the other three.
The state bill is the smaller half
Whatever Illinois does, the conversion is federal ordinary income first. The federal bracket you land in, and whether the conversion pushes you over an IRMAA threshold two years later, will usually move more money than the state line does. The state answer tells you whether to convert here; the federal answer tells you how much to convert at once.
Paying the tax from outside the account matters more than either. Using converted dollars to pay the bill shrinks the balance that was the entire point of converting.
Sources
Authority: 35 ILCS 5/203(a)(2)(F); IDOR Publication 120 (Retirement Income); 35 ILCS 405/2(b); 35 ILCS 405/3.
Compiled from state statutes, session laws and revenue-department publications and adversarially verified in July 2026. Dataset confidence for Illinois: high.
This page states what the cited authority says. It is not tax advice, and a conversion large enough to matter is worth putting in front of a preparer who can see your whole return.