MO & IL follow the general rule is: your report all your income on your home state return, even the income earned out of state. You file a non-resident state return for the state you worked in and pay tax to that state. Your home state will give you a credit, or partial credit, for what you paid the non-resident state. You will have to file a non resident MO state return and pay MO tax on the income earned there.. You will also file a IL full year resident return and calculate tax on ALL your income. IL will give you a credit, or partial credit, for the tax you pay MO So, there will be little or no double taxation, but you have the cost and hassle of filing two state returns. Do the MO nonresident state return first.
The critical sentence in @Hal_Al 's correct response is that you must complete the non-resident MO tax return first, before you do your home state IL tax return. Doing the returns in the correct sequence insures that your IL return will include the credit for the tax you pay to MO.
Thanks for the info. Any advise on how I can recover the money I paid in to IL when filing this year's return.
It seems like this was an error since I was required to pay in $9 for MO but over $1k for IL.
If you only paid MO $9, then the credit from IL will be no more than $9. It sounds like you made an error on your MO non-resident return.
@calendurham --
I suspect you completed your IL return before you did your MO return, which is the reverse of the recommended sequence.
If done correctly, your Illinois return should show an "other state credit" for taxes paid to MO. And there should be no "other state credit" on your MO return.
The "other state credit" is granted by the resident state.