Income listed in 2 states; but only worked in one

Forum|Forum|2 years ago
January 30, 2024
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My W2 lists my full income for the state I live in (KY) and they took out the state taxes. However, they also listed the state my employer is based out of (IL) and reflected my income earned there as 2/3 but no taxes taken out.

So for example total income is 50,000 and on my state portion of my W2 it lists KY $50,000 with the appropriate taxes taken out and IL reflects $33,000 with no taxes taken out. I never worked in IL - it is just where the home office is located.

Do I need to do anything special for IL since they didn't take out taxes and the full amount of income was listed for KY? I asked my employer and they said nothing was wrong with the W2 and they wouldn't reissue, so I'm trying to be sure I don't mess anything up. Thanks for any help you might be able to provide.

Mike9241

The w-2 seems wrong since you say you performed no work in Illinois. it doesn't matter since there's a reciprocal agreement between IL and KY where you are only taxed on your wages based upon your resident state.

here's what Illinois form NR says

If you are a resident of a reciprocal
state or a military spouse, you do not have to file Form IL-1040 and
Schedule NR unless you
● earned income in Illinois from sources other than wages paid to
you as an employee, or
● had Illinois Income Tax withheld from your pay in error.

so based on the above you probably are not required to file any return for IL

but I do think based on what you provided your company reporting any part of your compensation as IL wages is wrong.