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skatofia
New Member

Live in Michigan, work for Chicago employer remotely full time from Michigan

Hello,

 

I currently live in Michigan and I work remotely full-time in Michigan. My employer is from Chicago, IL. Do I have to pay taxes to both states and localities? Do I just owe Michigan? Do I just owe Illinois? How does this work?

 

Thanks.

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2 Replies

Live in Michigan, work for Chicago employer remotely full time from Michigan

You only have to pay tax to Michigan. Illinois only taxes income "paid in Illinois," so income earned while working remotely in Michigan is not "paid in Illinois" and not subject to IL income tax.

 

Even if it were, Michigan and Illinois have a reciprocal agreement, whereby a MI resident working in IL pays tax to their home state (MI) and not their work state (IL). Your employer should be withholding MI tax. If not, file IL-W-5-NR to stop IL withholding and MI-W4 to start Michigan withholding.

 

See When is compensation paid in Illinois? in Who is Required to Withhold Illinois Income Tax.

TomD8
Level 15

Live in Michigan, work for Chicago employer remotely full time from Michigan

And if your employer cannot or will not withhold Michigan taxes, you should make quarterly estimated tax payments to Michigan.  See this reference:

https://www.michigan.gov/taxes/0,4676,7-238-73294_73296_73297_75057_77806---,00.html

**Answers are correct to the best of my ability but do not constitute tax or legal advice.
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