Double state taxation

[UA24]

I am an Illinois resident that earned Idaho-sourced income working remotely for a company based in ID.  The HR administrator withheld state income tax for Illinois and not Idaho.  When I filled out both state tax returns (IL resident form1040 and ID non-resident form 43)  TT calculated that I owed tax to Idaho on the income indicating double taxation. Idaho has no reciprocity with any other state. The Idaho Form 43 instructions say that non-residents do not qualify for the credit on income tax paid to other states.  Am I truly stuck being double taxed? 

Thank you to all in advance.

[DawnC]

No, you are not stuck.  Two things.

1. If you did all the work in IL from your home, you owe no tax to ID.   Neither of those states have the Convenience of the employer rule.   Your income is sourced in the state you earned it in, which sounds like IL.   If this is the case, allocate no wages to ID and request a full refund by filing an ID nonresident return.   Have your employer only withhold IL.   There will be no credit on your IL return because you should pay no tax to ID.
2. If you did some or all the work in ID, Illinois should give you a credit for tax paid to ID for the wages earned while in ID.    If you created the non-resident return first, and allocate only the wages earned while physically present in ID, TurboTax should have applied the credit for taxes paid to another state on your resident IL return.  If you did them out of order, go back through the IL return, but I believe you are in situation 1.) above, so you need to go back through and allocate no wages to ID to get your withholding back.  

Do I have to file a nonresident return for an out-of-state employer?   Generally, no, but since your employer withheld the wrong state tax, you have to file if you want a refund, see next link.     Why Do I Have to file a nonresident return?   Because your employer withheld taxes for the wrong state.   

[UA24]

DawnC,

Thank you very much for your response.  To reiterate and clarify, since I performed  all the work remotely from my home in Illinois and had no physical presence in Idaho at any time the income is considered Illinois sourced even though my employer is based in Idaho and I do not have any income tax obligation to Idaho.  Correct?

Thank you again.

[DawnC]

Correct.  And you are welcome!     Do I have to file a return for an out-of-state employer?