My daughter moved from WI to IL on 8/1/18. She worked for an IL employer for all of 2018. Can she claim a credit for IL state taxes from 1/1-7/31?

[DanielV01]

Were only IL taxes withheld, or were Wisconsin taxes also withheld?

[honkster]

Only IL taxes

[DanielV01 · Accepted solution]

She doesn't claim a credit, but rather, she will allocate her Illinois income.  She will file part-year resident returns for Illinois and Wisconsin.  Since Wisconsin and Illinois have a reciprocal agreement, she should have been taxed in Wisconsin only when she was living in Wisconsin.  To claim this on the return, she will file an Illinois part-year return, but only claiming in Illinois the income that was earned once she was living in Illinois.  She will still claim all of the taxes paid to Illinois.

Then, she will fill out a Wisconsin part-year return and claim the income that she earned while living in Wisconsin to Wisconsin.  

The effect will be she should receive a signifiicant refund from Illinois for the portion of the year she was not living there, and then use that refund to pay Wisconsin tax that will be due.