CA resident worked last quarter of 2020 in IL

[akudrimoti]

Hi,

I'm a long time resident of CA (since 1993) hand have filed state taxes for CA.  I own a primary residence and also a property I'm renting out, both in CA.  My employer is a corporate with a FL company address on my W2s for 2020.  I underwent a change of job position in Oct 2020 where the new job position is out of an IL location of the same company.  However due to COVID, the company allowed me to work remotely from home in CA.  This will continue in 2021 for some time as well.  The previous jobs W2 has only CA state listed. The new job W2 has two states listed CA and IL with Box 16 stating identical numbers but Box 17 showing different state taxes withheld for each state.  Am I required to file a non-Resident tax in IL *and* also a resident state tax in CA for 2020 for the same reported income?  That does not sound good because I will be double taxed.  Will I be able to claim a refund of the IL state tax withholding because I did not reside in IL in 2020?  How will that change post COVID if I do decide to work out of IL but keep my CA residency?

[MaryK4 · Accepted solution]

You will need to file a nonresident Illinois return because you did not actually work in Illinois.  You will want to file an Illinois nonresident return to get the state withholding returned to you. (You report 0 IL income.)

If you do start work in Illinois in 2021 but keep your California residency, you will file an IL nonresident return and report only the income you earned in Illinois.  You must file the California resident state tax return and report all income.  So that you are not double taxed, California will apply a credit for the amount of tax you paid to Illinois on the income.