How to file Illinois & Michigan taxes for part year residency?

[eversmile_93]

My husband and I usually opt for “Married filing jointly”. Just take normal standard deduction/ state exemption and nothing additional.

My husband lived and worked in Illinois until Aug 2024, so taxes were paid to IL. He then got a transfer, working in Michigan from Sept, paying tax to MI. He stayed with a friend as roommate till Nov.
I lived and worked in Illinois until Nov 2024 paying tax to IL. From Dec 2024, both of us have completely moved to Michigan address. My work location is still in IL, so they used our old address and taxed me to IL.

I am not sure how to file together for Illinois and Michigan. Should we opt to file separately?

[DavidD66]

For federal tax, you almost always pay more in tax if you're married and file separately (MFS).  Even though your husband was staying in Michigan while working there, he was still an Illinois resident.  You should file a joint federal tax return and a joint Illinois tax return.  You will also have to file a Joint Michigan tax return.  Illinois and Michigan have reciprocal agreements with each other.  Residents of reciprocal states working in Michigan do not have to pay Michigan tax on salaries or wages earned in Michigan.  You will have to file a Schedule NR along with an MI-1040 to receive a refund of Michigan tax withheld.  

[eversmile_93]

But we did move to Michigan in Dec 2024, how does that work?

[MaryK4]

You will want to file a Part Year return for Michigan and Illinois.  Because Michigan and Illinois are reciprocal states, you can file and pay income to you resident state if you earn it in a nonresident state.  You will want to include on the Illinois return all the income you both earned January to November,  On the Part Year Michigan return, include the income you earned in December.  You will probably want to use either the percentage method (92% to Illinois, 8% to Michigan) or find the paystub to get the amounts earned in December.  @eversmile_93