It's unclear to me from the question whether your fiancé is a resident of Kentucky or Illinois or perhaps some other state. But I am assuming that he is a resident of Kentucky. If TurboTax is showing that he owes money to Kentucky, then that is likely correct for the 2024 return. The reason why is because he never had any state withholding taken out for Kentucky.
Again, assuming I've gotten his resident state correctly identified as Kentucky, he needs to go into the Personal Info section of TurboTax and indicate that he did earn money in another state: Illinois.
Then he needs to go to the State Tax Return section, and TurboTax should prompt him to add an IL tax return. On that return, he should get a refund of everything he had withheld to IL on his W-2.
So the end result is that he'll owe Kentucky because he didn't pay them any withholding all year, and he'll get a refund of everything he paid to Illinois.
Now, going forward, he needs to get this corrected by filing Form IL-W-5-NR with his employer; the purpose of this form is to show them that he should not have IL taxes taken out anymore; the withholding should go to KY.
Note that he will still run into the issue on the 2025 tax return he files next year. Meaning he will have to file for a refund on an IL state tax return, but he'll likely owe again on the KY return. But starting in 2026, this should no longer be an issue.
If I have incorrectly assumed that he is KY resident, please let me know.
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