If the taxpayer is a resident of Iowa, Kentucky, Michigan, or Wisconsin and worked in Illinois, the taxpayer must file Form IL-1040 and include Schedule NR if:
- they received income in Illinois from sources other than wages, salaries, tips, and commissions (taxpayer must pay tax on this income regardless of residency) or
- they want a refund of any Illinois income tax withheld.
If a nonresident taxpayer received wages, salaries, tips, and commissions from an Illinois employer, they are not required to pay Illinois income tax on this income. This is based on reciprocal agreements between Illinois and these states.
If the taxpayer's employer is withholding Illinois tax, the taxpayer should fill out a Form IL-W-5-NR, Employee's Statement of Nonresidence in Illinois, and give it to the employer so they will stop the withholding. The taxpayer will need to file an Illinois nonresident return to get any withholding refunded.
In the reciprocal state return there will not be a credit for taxes paid to Illinois since the taxpayer did not owe them.
Additional Information: