The general rule is: your report all your income on your home state return, even the income earned out of state. You file a non-resident state return for the state you worked in and pay tax to that state. Your home state will give you a credit, or partial credit, for what you paid the non-resident state. The general rule applies to IN-IL. You will have to file a non resident IL state return* and pay IL tax on the income earned there.. You will also file a IN full year resident return* and calculate tax on ALL your income. IN will give you a credit, or partial credit, for the tax you pay IL. So, there will be little or no double taxation, but you have the cost and hassle of filing two state returns. Do the nonresident state return first.
You may have heard of "reciprocal states". This does not apply to IN & IL, even though they are neighboring states.
* If 2023 was the year of your move, you will file part year resident returns for both states.
