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When you have a non-resident return and a resident return to prepare, prepare the NON-resident state return first, then the return for the state you live in.
Always finish your federal return first. The data from your federal 1040 forms flows to both state returns.
Next, complete your Non-Resident Illinois return before your Kentucky return. Illinois and Kentucky do have a reciprocal agreement, but it only applies to W-2 wages.
If your Illinois income was strictly W-2 wages, you might not actually owe Illinois anything (and should have filed an exemption form with your employer - IL-W-5-NR Employee’s Statement of Nonresidence in Illinois)
If your income was from other sources in addition to W-2 wages (e.g., rental property or business income), you must file the Illinois return to get any refund or to pay any liability.
And finally, complete your Resident Kentucky return last.
As a resident, Kentucky taxes you on all your income, regardless of where you earned it.
By finishing Illinois first, the program can take the tax you paid to Illinois and apply it as a Credit for Taxes Paid to Another State on your Kentucky return.
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