844195
Let's say I lived in IL from 01/01-06/30. I then moved to IN as of 07/01 and lived there throughout the remainder of the year.
I worked in IN all year. Withholding was to IN only. I was commuting while living in IL.
How would I allocate amongst the states? They do not have a reciprocal agreement. Would I simply apportion half my income to each state? I would presume that I would then receive a refund from IN since I withheld there for a full year let only lived a half, and would have a balance due to IL.
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Close...but not quite..
1) Just for the IN job income...……….. that is all IN-reportable income and all fully taxable by Indiana.....but the half of it that you earned while an IL resident is also IL income on an IL part-year tax return.....But#2, you get a credit in IL for the taxes you owed to IN on that half-year's worth on Non-resident IN income.....not the whole year of withholding...just what you were taxed by IN for that first half of the year working there.
2) Everything else, all other income, Interest, dividends, capital gains, is divided up according exactly when you received it. Every $$ of that type thru the end of June is allocated to IL on it's part-year tax return, and every $$ received after 30 June is allocated to IN on it's part-year tax return.
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TTX software can handle the calculations, but sometimes the allocation interview will get confusing, and you have to print it all out..look at it closely, then go back and make corrections...BUT...you have to get every scrap of every $$ of income of all type...and all Deductions&Credits into the Federal section first....every scrap...before you venture into the IN and IL Part year tax returns.
IF this will be for 2019 taxes to be done in early 2020...Don't start on it until you get all your tax paperwork from all issuers...Mid-Feb at the earliest. IF you're still struggling in Mid-March, get all your stuff to a local tax professional to get it done right.
And keep all your monthly bank statements, Brokerage/Mutual fund statements printed out for every month since every $$ from everywhere will have to be allocated to IL or IN based on the before vs. after 30 June date (or whenever you take up residence in Indiana).
Which state you get a refund for...or owe to, will really depend more on your other income and when it is received by you or your accounts and at what level the IN withholding is being done at the job. Indiana rates are lower than IL, so if all your income is received evenly over the year, then yeah, you may owe IL some because the credit for taxes paid to IN for the first half of the year should be short of the ~5% IL is assessing, An IN refund is questionable. Don't forget that if you have Mutual Funds, most Div&Cap Gain distributions are done at the end of the year, so those $$ would be now be IN income to be taxed there, and not IL.
Good luck
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