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I own home in VA. Am a contractor and worked/lived all year in IL but will return to VA when project is done. Can I claim IL as residence?

 
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ToddL
New Member

I own home in VA. Am a contractor and worked/lived all year in IL but will return to VA when project is done. Can I claim IL as residence?

Based on your situation, you should not claim IL as your state of residence, although you probably owe IL tax for what you earned in IL.

Generally, you're a resident of a state (or country) if you intend to either stay there permanently, or return there after a temporary absence. It's where home is – where you come back to after being away on vacation, business trip, overseas or out-of-state employment, or school. Many factors are considered, not the least of which are where you are registered to vote, own homestead property and are licensed to drive.

When you complete the My Info Personal Interview:

  1. Select Virginia as your state of residence;
  2. Answer "No" when asked if you "Lived in another state in 2017?" That question only applies if you changed your state of residence in 2017.
  3. When asked if you "Earned money in another state?", answer "Yes" since you physically worked in Illinois.

You will be taxed on your wages both where they are earned (IL) and in your home state (VA). However, VA will give you a credit (against your VA tax) for the IL taxes (nonresident state) you paid on on the same income.

You will want to work on your non-resident IL state tax return first. You will then take a tax credit from your non-resident IL return on your resident VA state tax return. (Please note that you will only get a tax credit for your IL taxes up to the amount of VA taxes that would have been paid if the income was earned inVA).  

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1 Reply
ToddL
New Member

I own home in VA. Am a contractor and worked/lived all year in IL but will return to VA when project is done. Can I claim IL as residence?

Based on your situation, you should not claim IL as your state of residence, although you probably owe IL tax for what you earned in IL.

Generally, you're a resident of a state (or country) if you intend to either stay there permanently, or return there after a temporary absence. It's where home is – where you come back to after being away on vacation, business trip, overseas or out-of-state employment, or school. Many factors are considered, not the least of which are where you are registered to vote, own homestead property and are licensed to drive.

When you complete the My Info Personal Interview:

  1. Select Virginia as your state of residence;
  2. Answer "No" when asked if you "Lived in another state in 2017?" That question only applies if you changed your state of residence in 2017.
  3. When asked if you "Earned money in another state?", answer "Yes" since you physically worked in Illinois.

You will be taxed on your wages both where they are earned (IL) and in your home state (VA). However, VA will give you a credit (against your VA tax) for the IL taxes (nonresident state) you paid on on the same income.

You will want to work on your non-resident IL state tax return first. You will then take a tax credit from your non-resident IL return on your resident VA state tax return. (Please note that you will only get a tax credit for your IL taxes up to the amount of VA taxes that would have been paid if the income was earned inVA).  

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