WY corporation income for an IL state resident

Forum|Forum|2 years ago
October 23, 2023
2 replies
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Hello,

I have a S Corp in WY and made 75K in TY 2022. I am a resident in the State of IL. Do I have to include this income I made from WY in IL State Return. Already this income is included in the Fed Return.

However, I noticed IL State Return takes into account my AGI, which includes WY income also . Thant means I have to pay taxes for IL on the 75K that I earned in WY??? Need some clarification, please. Thank you.

xmasbaby0

Employee

If you paid income tax in the state where you earned the $75K, then you would be filing a non-resident return in that state, and IL would credit the amount of tax already paid to the non-resident state. But Wyoming has no state income tax. So you paid no WY income tax and will not file a WY income tax return; you live in IL and IL is going to tax your income.

@Mike9241 ?? Thoughts?

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

Rick19744

Employee

A few comments:

Who prepared the S corporation return?
The S corporation may have nexus with other states that require filing in those states.
Did you receive any other state K-1's from the S corporation?
If the S corporation does have nexus in other states, then there may be nonresident withholding requirements, composite return options, etc.
Depending on the response to bullet number 3, this will also dictate where you as a shareholder may have other state filing requirements.
There are a number of other issues that could be involved.

*A reminder that posts in a forum such as this do not constitute tax advice.Also keep in mind the date of replies, as tax law changes.

TomD8

Employee

But regardless of your possible tax obligations to other states, the answer to your original question is YES, you must include that income on your Illinois tax return. Your resident state of Illinois can tax all your income, regardless of its source.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.