How do I file my taxes when I only lived and worked in MO but my employer incorrectly gave me two w2's splitting my income and state taxes in both MO and Illinois?

[nowaycanthisbeta]

I need to file only MO taxes and pay only my Federal and MO state taxes while getting all the Illinois taxes refunded.

[DoninGA]

You have to file a nonresident Illinois tax return and a resident Missouri tax return.  Complete the Illinois return before the Missouri return.  

In the My Info section of the program indicate Yes when asked if you made money in any other state.  In the dropdown choose Illinois.

[nowaycanthisbeta]

Thank you for the response. The issue I have is I didn't earn any money in Illinois. I just need to get the state taxes I paid to Illinois and just file a return for MO.

[BillM223]

Unfortunately, the mechanism for you getting money wrongfully withheld to another state is to do what DoninGA said and file an Illinois return, showing no Illinois source income. The reason is that your employer has already sent that withholding to the state.

And you should immediately go to your payroll department and make sure they aren't still withholding for the wrong state or else you'll have to do it for tax year 2022.

[Gazelle94]

I have a similar situation. I live in Illinois and work full time in Missouri. On my W-2 from my Missouri company in box 17 it shows my company taking out state taxes for Illinois and Missouri. In box 16 it only lists Missouri wages, the Illinois wages box is empty. When I entered $0 for Illinois wages it says that I have an incorrect entry and the message,  "I cannot file my Illinois return electronically if I have a W-2 with Illinois withholding greater than 20% of Illinois wages. I can however e-file my Federal return in this situation." Is this an error on may company's part? How can I e-file my return?

[SharonD007]

You will not be able to e-file your Illinois tax return because the wages for your Illinois income is zero on your W-2. You will have to mail it. 

Since taxes were withheld in Missouri, you must file a non-resident Missouri tax return. When you file your resident Illinois tax return, you will get a credit for the taxes that you paid to Missouri. Since your W-2 has all your wages as Missouri income and zero for your Illinois wages, you will have to allocate your wages when you prepare both tax returns. Prepare your non-resident tax return for Missouri first then your Illinois resident tax return next. 

For additional information, please refer to the TurboTax article Multiple States—Figuring What's Owed When You Live and Work in More Than One State.

[Gazelle94]

Ok, thank you. I am also filing a non-resident Missouri tax return.  Do I have to mail in the Missouri tax return as well as the Illinois tax return?  I do not know how to allocate the wages.  Payroll said that they consulted with their corporate tax accountant about this issue and this is their response:  "They agree that her the company has the W-2 presented was correct.  All wages are MO sourced wages and the Illinois withholding was an election made by the employee but no wages are sourced to IL, therefore they agree with $0 wages to be reported in box 16."  I consulted with a tax preparer from Illinois and they said I needed a corrected W-2, that if I sent in my return with a $0 in box 16 it would be a huge mess.  I don't know what to do.  Should I just mail in my Illinois tax return with the W-2 showing $0 Illinois wages in box 16?  Will I need to fill out a special form to get the Illinois taxes that were withheld in Missouri? I want to get all the taxes back that I am supposed to. Can go ahead and e-file my federal tax return and e-file my Missouri tax return since those appear to be correct?  I'm just really confused about all of this. Help please. 

[DaveF1006]

Yes, you will need to mail in the Illinois State return, with the W2 showing the 0 wages in Box 16, and the explanation given by the corporate tax accountant so you will be given credit for the tax withheld. 

You may efile your federal and Missouri state returns with no restrictions. As far as mailing in a special form, here is how to report your state returns.

1.  Prepare your Missouri non-resident return first. 
2. Then prepare your resident Illinois state return.  You will be given credit for the taxes you paid to missouri.

@Gazelle94