Tax help for military filers

Ok, I'll try to summarize. 

With an HOR of IL, you are considered an IL resident, no matter where you are posted, unless you changed your State of Legal Residence (SLR) to another state (TN?) using a form DD2058, filed and accepted by your Military HR/personnel dept.  IF changed that way, your SLR takes precedence over your IL-HOR from that acceptance date forward.   

IF you have not prepared and filed a DD2058, then both your HOR and SLR remains IL and you would likely need to file an IL Resident tax return.  Having a TN Driver's Lisc. doesn't change that, but complicates filing an IL tax return "electronically", because the IL ID/Drivers Lisc is required to "E-file", and then you'd have to print and mail-file the IL tax return.

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Assuming for the moment, that no DD2058 was filed by you, and you are thus considered a full-year IL resident for tax purposes, you have to file an IL tax return 1)  if you are also required to file a Federal tax return (you probably are)  or 2) if your base IL income (line 9 of the IL-1040) ) is greater than the IL minimum for filing .

.....the thing is, since you are physically posted out-of-IL, you will get to subtract any  box 1 income on that military (edit) W-2, from your IL income (it uses Schedule M, but the IL interview should ask about that)....but any other income, interest dividends, investment income , is still subject to IL taxation.

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Then also...you haven't indicate if you are single or married, and if married is spouse civilian or in military too. That can get complicated....or not depending on the circumstances.

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IF you DID change your SLR to TN with a filed and accepted DD2058, then you would file part-year IL in the year of the change, and the first full tax year after that, would no longer be required to file in IL...as your SLR is now TN (even if your HOR remains IL)

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This official IL Publication can get messy had hard to navigate...but here's  IL Pub. 102 for Military personnel....I don't think it's well written.  Other states give examples to help explain exactly what they are talking about:

pub-102.pdf (illinois.gov)