No, you should not file an IL income tax return nor pay IL state income taxes because MI and IL have a reciprocal agreement. Residents only pay income taxes to their home state, regardless of where they work. Per IL Dept of Revenue: 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.

Question

I live in Michigan and do side work in Illinois (1099) i know there is a reciprocal agreement between the two states so i should have to pay Il state taxes but im unsure how to file it

Forum|Forum|6 years ago
February 11, 2020
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HelenC12

No, you should not file an IL income tax return nor pay IL state income taxes because MI and IL have a reciprocal agreement. Residents only pay income taxes to their home state, regardless of where they work.

Per IL Dept of Revenue: 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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