Live in Tennessee but work in Illinois. I did not pay income tax this year but now it says I owe taxes to IL. Is that right?

Forum|Forum|2 years ago
April 10, 2024
2 replies
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I had IL income tax taken out in 2022 when I had moved to Tennessee, but I was reimbursed for it because TN doesn't have income tax. My employer updated my forms so I did not have any IL income tax withheld this year, however, now it is saying I owe a few thousand plus in state taxes to IL. This seems conflicting - am I supposed to pay income tax to IL if I don't live there?

I see info online that says you do unless you live in certain states (like WI, IA, MN, KY) but if that's the case, why did I previously get reimbursed? Did it change for 2024?

Not A Product Question

Mike9241

The fact that your domicile is in TN doesn't matter if you physically worked in Illinois. you are taxed on the inoem earned physically performed in the state, ,

jamiemonroe3Author

I work remotely in TN for an IL organization. Does that change it?

TomK2023

a nonresident, you must file Form IL-1040 and Schedule NR if

you earned enough taxable income from Illinois sources to have a tax liability ( i.e., your Illinois base income from Schedule NR, Step 5, Line 46, is greater than your Illinois exemption allowance on Schedule NR, Step 5, Line 50), or
you want a refund of any Illinois Income Tax withheld in error. You must attach a letter of explanation from your employer.

NOTE: If you are a nonresident and your only income in Illinois is from one or more partnerships, S corporations, or trusts that withheld enough Illinois Income Tax to pay your liability, you are not required to file a Form IL-1040.

Illinois Department of Revenue - Filing Requirements

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TomD8

Employee

@jamiemonroe3 --

If you were a non-resident of Illinois for all of 2023, and you never actually (physically) performed any work within Illinois, then your remotely earned work income is not taxable by Illinois. If this is your situation, and if Illinois taxes were mistakenly withheld from your pay, then you must file a non-resident Illinois return on which you show the withholding but allocate zero income to Illinois, in order to obtain a complete refund.

A few states tax non-resident remote workers. Illinois is not one of those states.

If you received a refund of taxes paid to Illinois in 2022, and you had deducted those taxes on your 2022 federal return, then the refund would be taxable on your 2023 federal (but not state) return.

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