I work in MO and live in IL. I was prompted to file taxes in both states and owed money to both. Is this correct? If not how do I get a refund?

MO & IL follow the general rule is: your report all your income on your home state return, even the income earned out of state. You file a non-resident state return for the state you worked in and pay tax to that state. Your home state will give you a credit, or partial credit, for what you paid the non-resident state. You will have to file a non resident MO state return and pay MO tax on the income earned there.. You will also file a IL full year resident return and calculate tax on ALL your income. IL will give you a credit, or partial credit, for the tax you pay MO So, there will be little or no double taxation, but you have the cost and hassle of filing two state returns. Do the MO nonresident state return first.