I work in Illinois but live in Wisconsin. My employer took IL taxes out of my paycheck so my taxes have gone to IL. What do I do?

[rascal17us]

The turbo tax software says I need to file a return in both illinois and Wisconsin but the way it's set up it looks like it wants me to pay the same tax twice.  I've filled out a form on the Wisconsin tax return (a schedule) but it didn't have any effect?  What do I need to do?

[HelenaC · Accepted solution]

Yes, you have to file two state income tax returns:

• For IL: File an IL Nonresident income tax return and since you are preparing a nonresident return solely to recover erroneous tax withholdings, enter 0 on the screen that asks for the amount of income earned in that state. This will eliminate your tax liability for that state, resulting in a full refund.

• For WI: You need to answer that all your income was earned in WI and you will pay the appropriate income tax.

Wisconsin has a state reciprocal agreements with Illinois so you don't pay sate income taxes to Illinois. Submit the following form to your employer so IL taxes are not withheld in the future: IL-W-5-NR

Additional information: 

• Why would I have to file a nonresident state return?

[QuinnJuliet]

Does TurboTax still charge for the Non-Resident Tax Return in this situation? I moved to Virginia from New Jersey November 2018. My employer accidentally took New Jersey instead of Virginia taxes out of my paycheck for the first two weeks of 2019. Will TurboTax charge for this New Jersey return, even though I'm just filing it to get the full refund for the taxes that were incorrectly paid? 

[JotikaT2]

Yes.

You are paying for access to the forms and filing your non-resident return.  

Sometimes states allow you to file directly from their websites but New Jersey only offers this option to New Jersey residents.

New Jersey E-file options on state website