Do I need to pay Illinois state taxes on a military reenlistment bonus if my home of record (Washington) does not have income tax?

Forum|Forum|4 years ago
October 2, 2021
1 reply
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I was in the military and stationed in Illinois when I received a reenlistment bonus. My home of record is Washington, where there is no income tax. The IRS has recently contacted me about missing Illinois state tax money from that year.

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GeorgeDenseff

The income earned while you were living in Illinois is taxable to the state of Illinois. You need to file state tax return and claim the bonus, then pay the state taxes on it.

TomD8

Employee

@jacobblade700

If you were on active duty when you received the bonus, and the bonus amount was included in Box 1 of your military W-2, it is considered military pay and is taxable only by your State of Legal Residence (SLR) - Washington, in your case (which of course has no income tax). It is not taxable by the state in which you happen to be stationed.

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