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Level 2
March 23, 2021
Question

state tax

  • March 23, 2021
  • 3 replies
  • 33 views
  • hello, I live in wisconsin and work in illinois. they have a reciprocal agreement. this year for some reason they charged me illinois taxes and not wisconsin. this has never happened before. now it is saying I owe $2,300 to wisconsin. this cannot be correct because I paid $2,700 in illinois. how can I fix this? i have not yet finished filling so i can hopefully fix this.  thank you for any help

    3 replies

    Alumni - Intuit
    March 23, 2021

    Reciprocity agreements mean that two states allow its residents to only pay tax on where they live—instead of where they work.  You should have filled out a  Form W-220 and submitted it to your employer.  You won't have to pay Illinois tax as a result of the reciiprocity agreement, but you will have to file a non-resident Illinois tax return in order to receive a refund of the Illinois tax withheld.  That is in addition to your Wisconsin resident tax return.  In the Illinois non-resident return, you will indicate that none of your income is taxable by Illinois, and you will receive a refund of all the tax withheld.

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    Level 2
    March 23, 2021

    @DavidD66 I really appreciate your help. I've worked for this company for years and this just happened. in the past I always paid wisconsin taxes. so do I need to file my taxes as is and pay the wiscosnin tax and then after I file everything file out the other form to get my illinois refund?

    Alumni - Champ
    March 23, 2021

    @fwhassler1 Actually, since you work in Illinois, the form you must submit to your employer is Illinois Form IL-W-5-NR, which you can download here:  

    https://www2.illinois.gov/rev/forms/withholding/Documents/currentyear/il-w-5-nr.pdf

     

    You must submit a non-resident tax return to IL, allocating zero income to IL, in order to receive a refund of the incorrectly withheld IL taxes.

     

    And you must submit a resident tax return to your home state of WI.  All your income is taxable by WI.

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