Are Illinois State taxes for part year residency refundable?

[ctcowboy33]

My daughter lived and worked in Chicago for two months. She received a W-2 with Illinois State taxes withheld. Connecticut is her state of residency. I have entered the W-2 into Turbo Tax which generated an Illinois State Nonresident and Part Year resident form which lists the taxes withheld on line 52 at 4.95%. First question, are these Illinois State taxes refundable? Second question, should these earnings and taxes be reported on the Connecticut State tax return? The Turbo Tax questionnaire wants the earnings taxed in BOTH states, but these were only taxed in Illinois. Thanks!

[Vanessa A · Accepted solution]

They are only refundable if she paid more than she owes based on her income.  If you do not live in a state but you do work in the state, unless the state has a reciprocal agreement with your home state (IL does NOT with CT) 

Yes, the income should be reported on her CT resident state return.  She will be able to claim a credit for taxes paid to IL on her CT return.  You will need to file the IL return first so you know the actual IL tax liability.  The actual tax liability, not the amount withheld, is the amount you can claim for the credit. 

[ctcowboy33]

Vanessa, thanks for the quick response! The Illinois State tax withheld and owed are the same. So that's done. The income is included on her CT return. It doesn't have any effect on her CT refund. She also worked in NY for a short time. Interestingly, that info is broken out (only in a worksheet) for the CT return as a qualifying jurisdiction, but the IL info is not. The CT return is only focused on her CT wages and taxes paid. Maybe a software issue as the IL is not showing up.