topic state tax in State tax filing

state tax

fwhassler1 — Tue, 23 Mar 2021 01:49:55 GMT

hello, I live in wisconsin and work in illinois. they have a reciprocal agreement. this year for some reason they charged me illinois taxes and not wisconsin. this has never happened before. now it is saying I owe $2,300 to wisconsin. this cannot be correct because I paid $2,700 in illinois. how can I fix this? i have not yet finished filling so i can hopefully fix this. thank you for any help

Re: state tax

DavidD66 — Tue, 23 Mar 2021 02:12:06 GMT

Reciprocity agreements mean that two states allow its residents to only pay tax on where they live—instead of where they work. You should have filled out a Form W-220 and submitted it to your employer. You won't have to pay Illinois tax as a result of the reciiprocity agreement, but you will have to file a non-resident Illinois tax return in order to receive a refund of the Illinois tax withheld. That is in addition to your Wisconsin resident tax return. In the Illinois non-resident return, you will indicate that none of your income is taxable by Illinois, and you will receive a refund of all the tax withheld.

Re: state tax

fwhassler1 — Tue, 23 Mar 2021 11:58:36 GMT

@DavidD66 I really appreciate your help. I've worked for this company for years and this just happened. in the past I always paid wisconsin taxes. so do I need to file my taxes as is and pay the wiscosnin tax and then after I file everything file out the other form to get my illinois refund?

Re: state tax

TomD8 — Tue, 23 Mar 2021 14:41:52 GMT

@fwhassler1 Actually, since you work in Illinois, the form you must submit to your employer is Illinois Form IL-W-5-NR, which you can download here:

https://www2.illinois.gov/rev/forms/withholding/Documents/currentyear/il-w-5-nr.pdf

You must submit a non-resident tax return to IL, allocating zero income to IL, in order to receive a refund of the incorrectly withheld IL taxes.

And you must submit a resident tax return to your home state of WI. All your income is taxable by WI.