Notice of proposed tax due

[lexzimmer]

I am originally from Illinois. I went to college and now live full time in Missouri. I was a full time student in 2021 when I filled my taxes. I put my permanent address in IL on my taxes, but my job I filed taxes for was in Missouri. I was refunded through federal and state (Missouri) taxes. My parents (still residing in my previous IL address) received a letter from the Illinois Department of Revenue stating that they did not receive my 2021 tax return and that I owe almost $700 in fees. I did all my taxes through turbo tax and am not sure why this is happening. Please advise as I need to respond swiftly to this notice. Thank you. 

[xmasbaby0]

When you attended school in MO and worked in MO, but were a student who was "temporarily absent" from your family home in IL, (and were being claimed as a dependent of your IL parents)  you were supposed to file a non-resident return for MO and a resident return for IL.   Sounds like you skipped filing in IL and now IL wants its share.     If the return you filed for MO was not a NON-resident return, you need to amend that one and file as NON-resident and then prepare a 2021 IL return.  The NON-resident one has to be done first.

@Mike9241     Your thoughts?

[lexzimmer]

I became a MO resident after my first year of college in 2017. I believe at that time, I was not sure of my next address as I typically moved every year, so I put my permanent address of Illinois. I was also still dependent under my parents. Sounds like I should have put my current MO address, is there anyway to go back and edit my taxes to switch it to my MO address of that time? Thank you.

[xmasbaby0]

You cannot have it both ways.   If you were claimed as a dependent by your parents who were in IL, you have to file an IL tax return.   A dependent who lives away at school is considered to be "temporarily absent."   You are considered to be an IL resident.

https://tax.illinois.gov/individuals/filingrequirements.html

From the link above:

an Illinois resident who was claimed as a dependent on your parents’ or another person’sreturn, you must file Form IL-1040 if

• your Illinois base income from Line 9 is greater than your Illinois exemption allowance, or
• you want a refund of Illinois Income Tax withheld from your pay.

[BillM223]

Children normally start life as a resident of the state that their parents live in. Missouri considers that state as your domicile. That state (Illinois in this case) remains your domicile until you take a number of steps to show that you have changed your domicile, like buy a house in the new state, register to vote, pay utilities, change drivers license, and tell people that you have a new residence.

Since you told TurboTax that you still lived in Illinois, Illinois has a right to look for tax from you, unless you can demonstrate to Illinois compelling reasons on why you have changed domiciles. Simply working for a company in another state is not sufficient.

Missouri defines a resident this way:

Resident - An individual who is domiciled in Missouri, unless the individual:

1. maintains no permanent place of abode in this state;
2. does maintain a permanent place of abode elsewhere; and
3. spends in the aggregate not more than 30 days of the taxable year in Missouri.

OR

Resident - An individual who is not domiciled in Missouri but:

1. did have permanent living quarters in Missouri; and
2. spent more than 183 days of the taxable year in Missouri.

Note that until you change your domicile to a new location (Missouri), you are still liable to be taxed in Illinois. Yes, this means that because of the 183 day rule above, you can be taxed in both Missouri and Illinois. You avoid double taxation by doing what xmasbaby said above, doing your Missouri return first, then your Illinois return, which should bring over taxes paid to Missouri to be used as a credit in Illinois.

Then, on your next tax return, give your Missouri address, if you have really moved to Missouri.