I Live in Illinois & Work in Wisconsin: How Do I Pay Income Tax?
Individuals who live in one state and work in another generally must file a tax return in both states. The state tax authorities determine how much income tax they pay according to their taxable income in each state. However, some states have reciprocal agreements with other states that exclude their residents from this requirement. The states of Illinois and Wisconsin have such an agreement. This means that Illinois residents who work in Wisconsin do not have to file a Wisconsin tax return. They can submit their tax payment directly to the Illinois Department of Revenue.
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Instructions
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Get the appropriate tax forms. Obtain a paper copy of Form IL-1040 or use the web fill-in copy on the Illinois Department of Revenue website.
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Complete the Illinois state tax return. Transfer the amounts from the state portion of Form W-2 to calculate the amount of Illinois state tax you owe. Work through the form and use the accompanying instructions to find out if you will receive a tax refund or if you will have to pay an additional balance due.
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Submit the form and any payment necessary. If you are sending in a paper form, enclose a check or money order for the tax due and send it to the Illinois Department of Revenue at the address listed on the tax return. If you are completing an online form, choose to have the tax payment directly debited from either your checking account or savings account.
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Tips & Warnings
The state of Illinois has reciprocal agreements with four states: Wisconsin, Iowa, Kentucky, and Michigan. Illinois residents who earn income in these states should report this income to the state of Illinois.
If the state of Wisconsin mistakenly withholds state income tax from earnings of Illinois residents, taxpayers can file a Wisconsin nonresident tax return to obtain a refund of those tax payments.
References
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