I live in Illinois and work remotely from Tennessee. Do I pay IL income tax?

Forum|Forum|4 years ago
May 3, 2022
1 reply
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Hello! I'm a new IL resident who went fully remote from my job in TN to be here. Now that I'm a IL resident, do I have to pay state income taxes for IL? If so, how soon after moving do I need to pay?

TN doesn't have state income tax so this is new for me.

rjs

Level 15

Yes, as an Illinois resident you have to pay Illinois tax on all your income, no matter where the income is from. If you moved during the year you will have to file an Illinois part-year resident return for the year that you moved. For subsequent years you will file an Illinois resident return each year.

You have to pay Illinois tax on any income that you received while you were an Illinois resident. You file the Illinois tax return at the end of each year, at the same time that you file your federal tax return. Is your employer withholding Illinois tax from your pay? If not, you should make estimated tax payments to Illinois during the year. Otherwise you will end up with a huge tax bill at the end of the year, plus penalties for not having paid any tax during the year.

Hal_Al

Level 15

Even if you had physically worked in TN, you would still owe IL tax. You report all your income on your resident state return, including the income earned in the other state. Your home state calculates tax on all your income, but gives you a credit, or partial credit, for tax you paid to the other state.

When you worked in a state without an income tax (e.g. TN), there will be no credit, since there was no TN 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.