You may qualify to take a credit for taxes paid to another state while a resident of Illinois. If the income was taxed in both Illinois and the other state, you are a resident of Illinois and you filed a tax return in the other state, you can take the credit. The program will automatically calculate the credit if you file a resident Illinois return and a nonresident return for the other state. Any entry you make into the program will override the program's calculations.
If you are a part-year Illinois resident, you can take the credit only on income that you earned while a resident of Illinois. The program will not calculate the credit automatically on part-year returns; you must enter the information manually. You will need to manually enter the total tax and the income amounts from the other state's PDF into the Illinois portion of the return to correctly calculate the credit. The PDF can be viewed on the Summary/Print screen.
Nonresidents do not qualify for this credit.
If you earned income in a reciprocal state, such as Iowa, Kentucky, Michigan or Wisconsin, the other state should not have taxed the income. If your employer withheld tax from your pay for a reciprocal state, you cannot claim the credit for taxes paid. You must file a return for the other state to claim a refund for the taxes withheld. Please refer to the Which states does Illinois have a reciprocal agreement with? instructions on how to correctly claim a refund for taxes paid in a reciprocal state.
