Filing taxes in multiple states

[mitty2day]

This year, I work and have a residence in Missouri; however, I am working remotely from my parent's house in Illinois to help care for my dad and mom.  Most of my time now is spent in my parent's house.  I periodically go back to Missouri around every month or so for work and to take care of my house there.  Do I need to fill out taxes for Illinois as well as Missouri? 

[pk]

@mitty2day , generally IRS would consider income source as the place where work is performed.  Thus in your case since your remote work is performed in IL,   this income would be recognized as in state income ( for IL ).  However in looking at IL DOR   and its ref'd pub 130, appears to class you neither as an employee ( for purposes of IL withholding) not your employer  as an IL based enterprise ( assuming that your employer does not do any business in IL ).  This would mean that  your employer is not required to withhold IL taxes  nor for you to recognize  this  work ( remote) income as IL sourced.   Also Missouri  does not have a reciprocity agreement with IL.   Hence my general ( and surprising ) conclusion is that  you do not need to file  and/or recognize  this remote work income as IL sourced. 

So you do not need to file an IL return.

However, since this whole area is somewhat murky/ developing, perhaps you should consider calling and discussing this with IL DOR to guide your decision in this regard.

Is there more I can do for you ?

pk

[mitty2day]

The company I work for does have a large amount of facilities all over the US (and globally) which includes Illinois.  The project in the company I work for is "for the most part" strictly located in Missouri.  Does that change your opinion on whether I need to file taxes next year in Illinois? 

[pk]

@mitty2day ,  whether you work on an IL project is not material -- it where the work is performed.  So no my opinion still remains.

However, one could argue, that since the employer , knowing that you are working offsite and in  IL, still did not withhold any Il taxes  ( i.e. did not segregate  pay by state ), you following your W-2 statement.  But I think this will probably not stand if IL demands its share of taxes.  Still suggest , call IL DOR by phone and see what they suggest in your case -- since you work mostly offsite and travel between IL and Missouri, etc. etc. The proceed accordingly.

If IL insists then you will have to prepare IL return first, then prepare  MO taxes , allocating incomes between the states so that MO gets its share of the taxes.

Sorry , I did not have better suggestions for you .

pk

[TomD8]

@mitty2day 

This example from page 4 of Illinois Publication 130 would seem to describe your situation precisely:

"Mary is an Missouri resident who earned $60,000 in wages from her employer for the tax year. During the
year, she performed services for her employer for 35 days in Illinois out of 250 total working days for the year. Accordingly, 14 percent (35 working days divided by 250) of Mary’s wages, or $8,400, was paid in Illinois and is subject to Illinois income tax withholding."

https://www2.illinois.gov/rev/research/publications/pubs/Documents/pub-130.pdf

Work income paid in Illinois is taxable by Illinois.

In my opinion you must file a non-resident Illinois tax return in addition to your home state Missouri tax return.  (If your main or primary home - your domicile in tax terminology - is in MO, all your income is taxable by MO.)  You'll be able to claim a credit on your MO return for the taxes paid to IL, so you won't be double-taxed.

In TurboTax, be sure to complete the non-resident state return before the home state return, so that the program can calculate and apply the credit correctly.