Hello Again, David
I just need some clarification of your last answer. You said that "Illinois does not provide a way to deduct the amount on the tax return if it is reported on the W-2 as Illinois income." But, what if the W-2 reports TX income? My W-2 lists Box 13: Third-party sick pay, Box 15: State/Employer's state ID TX, Box 16: State wages, tips, etc $43,000, Box 17: $0.00.
So, I'm getting a TX W-2 (because my benefits are based on my years working in TX), but I now live in Illinois. I asked my LTD company for a corrected return leaving box 16 blank and their response was, "Although, there is no income tax for the state of Texas, we have to include the income paid in Box 16. You will continue to see an amount Box 16 , annually. Since Texas in a non-income tax state, there is nothing to report. The W2 is in accordance with IRS guidelines."
Until last year my LTD company was erroneously reporting my income to IL instead of TX, but they have corrected that. I was also paying estimated taxes to the state of IL until July of last year. Illinois refunded my last 3 years of taxes after I filed amended returns, so they would seem to agree that I do not owe IL taxes on my benefits. However, I have been told that in order to get Jan-July of 2024 taxes back, I have to file an IL return and that even going forward that I have to file an IL return because filing a federal return will trigger a notice for IL.
How would you handle filing taxes to recoup the estimated taxes for 2024? Going forward, is it true that I still have to file an IL return even though no income is being reported to the state? And the income that I have would be exempt anyway because it is all LTD benefits?
I know this is a lot, but I am really struggling and I could use some help. Thanks.
