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bearferguson
New Member

Why do I owe IL State taxes?

I graduated from a Texas school 12/2015, have stayed in Texas and worked all of 2016 in TX, and started Masters program in TX Fall 2016.  My IL Parents have not paid for my school or living costs and are not claiming me as a dependent.  Turbo Tax still shows I owe IL taxes.  Why?

1 Best answer

Accepted Solutions
DanielV01
Expert Alumni

Why do I owe IL State taxes?

It depends.  If you still are considered an Illinois resident, then Illinois is allowed to tax all of your income.  However, if you have established Texas residency, you are not taxed in Illinois.  Please see this website on how residency is established:  http://www.wikihow.com/Become-a-Legal-Resident-of-Texas

Your situation is not automatic.  Usually, a student is considered to be temporarily absent from their home.  However, since you are no longer a dependent, and are doing everything in Texas, you may have by now established Texas residency (no state tax).  If this is the case, you may feel justified in not preparing an Illinois return, but you want to document your position in case Illinois asks for proof of your stance.

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1 Reply
DanielV01
Expert Alumni

Why do I owe IL State taxes?

It depends.  If you still are considered an Illinois resident, then Illinois is allowed to tax all of your income.  However, if you have established Texas residency, you are not taxed in Illinois.  Please see this website on how residency is established:  http://www.wikihow.com/Become-a-Legal-Resident-of-Texas

Your situation is not automatic.  Usually, a student is considered to be temporarily absent from their home.  However, since you are no longer a dependent, and are doing everything in Texas, you may have by now established Texas residency (no state tax).  If this is the case, you may feel justified in not preparing an Illinois return, but you want to document your position in case Illinois asks for proof of your stance.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
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