Allocating Pensions and IRA Distributions between IL & AZ

[espo31]

I have a 62 year old client from Illinois who retired in 2021 and took a lump sum distribution from a IRA and 401K in April 2021.  He also received a monthly pension in 2021.  In June he moved permanently to Arizona.  I believe he would be considered a Part-Year (PY)  Resident of both IL and AZ and would be required to file a PY Resident tax return for both states. 

1. How do I allocate the the lump sum and monthly distributions he received between the two states? Would the lump sum distributions he received while in IL (before he moved to AZ) be allocated only to IL ? 

2. As for the monthly pension, would I prorate it based on the % of time he lived in each state?  Please HELP !

This is critical because IL does NOT tax retirement income and AZ does.

Thanks

[George4Tacks]

Pensions are taxed to the state they are resident in at the time of distribution. The lump sum would be IL.  Assuming pension received around the first of the month, the monthly would be 6/12 IL and 6/12 AZ. Check with the client as to where he was when he go his June payment. 

When you get to the input click the box for Gross, then for Taxable to open a window where you can split the amounts for the monthly. A single entry for the lump sum would be IL .

[espo31]

Thank you George !