How does Illinois tax remote workers?

There are a few situations to consider. You may fall into more than one category.

1. I lived in Illinois.
• If you're considered a full-year or part-year resident of Illinois, you'll be taxed on all income earned from any source during your time of residency. Be sure to file the appropriate return.


2. I worked remotely from Illinois.
• Illinois taxes income earned for personal services performed while in Illinois (even if you're a nonresident). This includes remote work for an employer or clients based outside Illinois if you were physically in the state while doing the work.
• You may be able to claim a credit for taxes paid to another state on your Illinois resident return for any income required to be reported in multiple states. If you were a nonresident of Iowa, Kentucky, Michigan, or Wisconsin, and you had taxes withheld from these states, you'll need to file a tax return in these states to claim any refunds.


3. My employer was based in Illinois.
• If your employer was based in Illinois, they may have withheld Illinois taxes from your wages as shown on your W-2. However, as long as you didn't live or work in Illinois, you will not owe Illinois taxes on those wages and can file a nonresident return to claim a refund of those withholdings.
• If your employer didn't withhold Illinois taxes and you were a nonresident of Illinois, you probably don't need to file an Illinois return at all unless you otherwise have an Illinois nonresident filing requirement.

If your wages were minimal and you didn't do any other business in Illinois, it's possible you will be exempt from filing regardless of residency. See the Illinois IL-1040 instructions for more information.