Why do I owe IL State taxes

Forum|Forum|2 years ago
February 27, 2024
2 replies
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I am married and I live and work in IL but my husband works in MO.

My IL state wages were $58634.76 and state income tax was $2902.45.

My husband's MO wages were $43823.68 and state income tax was $1311.00.

We owe about $89 in MO state taxes, which makes sense to me. We always owe a little there. However, for IL Turbotax is saying we owe another $535 in IL state taxes.

Could you please explain where that would be coming from? We have no other income and at the 4.95% for our IL income, the $2902.45 seems correct.

Thanks!

Vanessa A

Missouri and Illinois do not have reciprocal agreements. This means, any income earned in MO as a non resident of MO and a resident of IL, would be taxable to IL.

IL does allow a credit for taxes paid to other states. Illinois does have a flat tax rate of 4.95%. So if your husband earned $43,823, then he would have a tax liability as a resident of Illinois to the state of IL of $2,169. Then he would have received a credit for the taxes paid of $1,400 for the taxes paid to MO. This would leave a tax liability of $769. However, if you received any other credits, this could reduce the amount you owed to $585.

But basically, the reason you owe to IL is because the amount he paid to MO did not give you enough of a credit to completely offset what he would have paid if he were living and working in IL.

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FeatherBAuthor

Ahhh this makes sense. Thank you so much!

T242

I have completed my federal and state however it says I owe 1,185 to y state? Why when Illinois doesn’t have state tax. What did I enter wrong?

DoninGA

Employee

@T242 wrote:

I have completed my federal and state however it says I owe 1,185 to y state? Why when Illinois doesn’t have state tax. What did I enter wrong?

Illinois has a flat 4.95 percent individual income tax rate. Illinois has a 9.5 percent corporate income tax rate. Illinois also has a 6.25 percent state sales tax rate and an average combined state and local sales tax rate of 8.86 percent.