What if I live or work in a state that has a reciprocal agreement with Illinois?

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If you are an Illinois resident taxpayer who worked in Iowa, Kentucky, Michigan, or Wisconsin, you must file Form IL-1040, and include as Illinois income any compensation you received from an employer in these states. Compensation paid to Illinois residents working in these states is taxed by Illinois. Based on reciprocal agreements between Illinois and these states, these states do not tax the compensation of Illinois residents. If your employer in any of these states withheld that state’s tax from your compensation, you may claim a refund of that state’s tax withheld by filing the correct form with that state. You may not claim tax withheld by an employer in these states as a credit on your Illinois return.

If you are a resident of Iowa, Kentucky, Michigan, or Wisconsin who worked in Illinois, you must file Form IL-1040 and  Schedule NR if:

• you received income in Illinois from sources other than wages, salaries, tips, and commissions (you must pay tax on this income regardless of residency) or
• you want a refund of any Illinois Income Tax withheld.

If you received compensation from Illinois employers, you are not required to pay Illinois Income Tax on this income. This is based on reciprocal agreements between Illinois and these states and applies only to compensation you received from wages, salaries, tips, and commissions. The reciprocal agreements do not apply to any other income you might have received, such as Illinois lottery winnings.

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