Question

Reciprocal state tax

Forum|Forum|5 years ago
March 15, 2021
1 reply
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I live in Illinois and work in Iowa, they are reciprocal states. My employer took out state tax for both states. How to I claim the reciprocal on my Iowa 1040 in order to be refunded for the amount paid in? Turbotax did not give me that option.

E

ErnieS0

Prepare a nonresident Iowa return in TurboTax and report $0 income to receive a refund of IA tax mistakenly withheld by your employer.

You should file by mail. Iowa says write “Illinois resident tax withheld in error” on the face of the return. Sign the return and include copies of W-2s with the return. Copies of federal and Illinois returns must be included.

You can e-file, but you may receive a notice from Iowa telling you’re the return does not match your W-2 and you’d have to complete the above process anyway.

An Illinois resident working for wages or salary in Iowa should complete and file the IA 44-016 (pdf) “Employee's Statement of Nonresidence in Iowa” with the employer so that the employer will be aware it is appropriate to withhold Illinois income tax.

Related Resource:

Iowa - Illinois Reciprocal Agreement

Iowa and Illinois Reciprocal Agreement

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