Yes, that is correct based on the instructions. File as married filing jointly and if there is any income taxed by another state, then you should receive a credit for taxes paid to another state on your Illinois (IL) tax return. The credit will be for your spouse's income that is also taxed in another state.
State Returns - Assumes both states require income tax returns to be filed: Prepare the other part year resident state
- Report the income earned while a part year resident.
- Report it on your resident state of IL and receive credit for taxes paid to another state.
Credit for taxes paid to another state is allowed by a resident state when the same income is being taxed to another state. Your resident state does not want you to pay tax twice on the same income. The credit that is allowed will be the lesser of:
- the tax liability actually charged by the nonresident state, OR
- the tax liability that would have been charged by your resident state
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