Working in IL and TX , home in Tx but also buying an apartment in IL - tax implication

[himanshushines]

Hello 

I live and work from home right now -Houston Tx. My new role within my organization is technically Chicago, IL based. But I will have flexibility to work from home in Houston and only go few % of work days to actual office in Chicago - lets say I badge in 100 days in a year at Chicago office. For those 100 days I plan to buy a Chicago downtown apartment as well the rest days I will fly back to Tx home and live with family in Houston. 

My family is based in Houston and will be that way going ahead, and wife works for Houston based role and we have so far file married jointly.

What are my tax implications here and how can I position myself better for 2021 and ahead? Say how can I use my work from home option flexibility to optimize my tax? Does idea of buying an apartment in Chicago make my IL state tax situation more unfavorable? My role started this year 1 Jan and I haven't traveled any day yet just because we also have a big corporate office in Houston and because of covid offices haven't opened, so am still Houston based employee as I have not initiated my relocation internally.

Some kind advice and guidance will be greatly appreciated.

Cheers

HK

[Hal_Al]

You will file a non resident IL tax return and pay IL income tax only on the income you earned while physically present in IL. 

Q. Does idea of buying an apartment in Chicago make my IL state tax situation more unfavorable?

A. No, in my opinion; but possibly.  State tax agencies can be aggressive  with "residents" who have 2nd homes in non-taxing states (e.g. TX).  But your TX home  appears to still qualify as your "domicile".

References:

https://www2.illinois.gov/rev/questionsandanswers/Pages/369.aspx

Which says, in part, "You are an Illinois resident if you were domiciled in Illinois for the entire year. Your domicile is the place where you reside and the place where you intend to return after temporary absences."

and https://www.isba.org/sections/statelocaltax/newsletter/2010/06/imanonresidentofillinoismaybe

Which says, in part, "A resident of Illinois is usually, but not always, domiciled in Illinois. The term “domicile” commonly means an individual’s 'permanent home,' which is where the individual intends to return to after a period of absence. A person has only one domicile and does not acquire a new domicile without first abandoning the prior domicile."