State Taxes

[ashlexr]

I worked in Illinois while living in Indiana. On my W-2 in box 15 it shows IL and boxes 16 & 17 each have an amount. Do I report these wages and taxes on my IL or IN state return if I lived in Indiana when I earned them? Shouldn't box 15 show IN? So confused.

[JotikaT2]

No.  Since your earned the income from Illinois sources, you will need to file a nonresident Illinois return.

You will then need to file resident state return for Indiana.  However, you will be able able to claim a credit for the taxes paid to Illinois on your Indiana return.  This ensures you are only taxed on the wages one time.

In the "My Info" section of TurboTax located in the black panel on the left, confirm that you have entered the correct state information: 

1. Click "Edit" to the right of your name 
2. Confirm your input under #2 "Tell us the state(s) you lived in" 
3. Do the same for your spouse if you are married filing jointly. 
4. Go back to the personal information section, and verify the mailing address and "Other state income" section.  Be sure to answer yes to the question asking "Did you make money in any other states?" and enter Illinois. 

Review your input under the wages section of the Income & Expenses section.  Be sure you have listed the state and income tax withholdings as reported on your W-2 form(s).

This will then allow you to enter your state returns for the nonresident state as well as the resident state. 

Please note the following as it will affect the calculations: 

When you are preparing more than one state return, make sure you prepare the Nonresident Illinois state tax returns first.   Be sure to answer the questions correctly to ensure only income sourced to Illinois is reported here.

Once you have entered all of the nonresident state information, then start your Indiana return.  This will ensure you receive any credits for taxes on income which may have been taxed in both states. 

Proceed through the screens in your Hawaii return until you see Take a look at Indiana credits and taxes. You should see Taxes Paid to Another State under the Credit for Taxes paid.   You can edit your information here if needed but the taxes paid to the other states should be listed in this section.