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."
To claim tax-exempt from Illinois withholdings:
If you qualify to be exempt from Illinois withholdings, complete Form IL-W-5-NR and provide a copy to your employer.
To claim a refund of taxes withheld from your Illinois income, follow theses steps in the program:
- State Section
- Nonresident Illinois Return
- Part Year and Nonresident Questions, Answer any questions regarding your Home of Record and Were you in Illinois only to accompany your spouse who was in the military? Yes
- Click Save
- Additions and Subtractions to Income Schedule M
- Complete Schedule M, please select "YES"
- Schedule M, Other Subtractions
- Enter the total Illinois portion of subtractions, enter the military spouse income.
Military Spouse income may be taxable on your state return where you file as a resident.