According to Publication 102, "Under the Military Spouse Residency Relief Act (MSRRA), effective for tax years 2009 and after, if
- you are a nonresident spouse of a service member,
- you and your service member spouse have the same domicile, and
- you are in Illinois only to accompany your spouse on his or her military assignment,
then your employee wages earned in Illinois are not taxable by Illinois."
How do I claim exempt?
If you qualify to be exempt from Illinois withholdings, complete Form IL-W-5-NR and provide a copy to your employer.
How do I claim a refund on my Illinois withholdings?
To claim a refund of taxes withheld from your Illinois income, you will need to file an IL nonresident return.
- In the IL Nonresident return, visit the Part Year and Nonresident Questions section. Answer the question "Were you in Illinois only to accompany your spouse who was in the military?" to mark the return for the military spouse.
- In the IL Nonresident return, visit the 'Income from Federal Return Subject to Illinois Tax' > Enter Other Income Taxable to Illinois. Enter the military spouse wages as a negative amount in the box labeled "Adjustment to your State Wages".
Military Spouse income may be taxable on your state return where you file as a resident.