Q. How does a travel nurse file taxes if they did not reside in their home state?
A. You may have a choice. But, the most likely way is: you file an IL resident return and non-resident returns for the state(s) you worked in. IL will give you a credit, or partial credit for any tax paid to the other state(s).
When you worked in a state without an income tax (e.g. Texas or Florida), there will be no credit, since there was no TX/FL tax. In other words, having worked in a state without an income tax does not get you out of paying state tax on that income, to your home state.
If you were truly a non-resident of IL, for 2024, then you file a resident return for the state you lived and worked in. If more than one state, you file part year resident states for each state. The fact that you refer to IL as your "home state" would appear to indicate that you are domiciled in IL.
According to the Illinois instructions:
An Illinois resident is an individual that is domiciled in Illinois for the entire tax year.
A Nonresident of Illinois is an individual that is not domiciled in Illinois at any time during the year.
A Part-Year Resident is an individual that moved into or out of Illinois during the year.
For tax purposes, being "domiciled" refers to the place you consider your true, fixed, and permanent home, which you intend to return to after any temporary absence. A person can have only one domicile at any given time, but may have multiple residences. Your domicile determines which state has the primary right to tax your income, regardless of where that income was earned.
While the terms are often used interchangeably, there is a key legal difference between domicile and residency.
- Domicile: Is based on your intent to make a location your permanent home. Taxing authorities will use this to determine which state can tax your worldwide income.
- Residency: Refers to the physical place where you live at a given time. You can be a "statutory resident" of another state if you spend a significant amount of time there (often more than 183 days), which could also subject you to taxes in that state.
Working a travel assignment (under 12 months in one location) does not mean that you have moved your primary state of residence in the eyes of the IRS and state taxing authorities. Instead, you’re just away from your home temporarily, which is the important distinction in regard to maintaining a tax home.
References:
https://www.americantraveler.com/state-tax-questions
http://www.thegypsynurse.com/tax-home/
https://www.trustedhealth.com/travel-nursing-guide/travel-nurse-tax-guide?utm_source=google&utm_medi...
