Live in Illinois, work in Indiana
No reciprocity: you file a nonresident return in the work state and pay its tax. Your home state gives a credit for that tax, so you pay the home state only if its tax is higher.
State income tax: $4,805 a year
Living in Illinois and working in Indiana, you'd pay about $4,805 in state income tax on $100,000 of wages.
No reciprocity: you file a nonresident return in the work state and pay its tax. Your home state gives a credit for that tax, so you pay the home state only if its tax is higher.
State tax at different salaries
| Wages | To IN | To IL | Total | If you worked in IL |
|---|---|---|---|---|
| $50,000 | $2,254 | $76 | $2,330 | $2,330 |
| $75,000 | $3,404 | $164 | $3,568 | $3,568 |
| $100,000 | $4,554 | $251 | $4,805 | $4,805 |
| $150,000 | $6,854 | $426 | $7,280 | $7,280 |
| $250,000 | $11,454 | $776 | $12,230 | $12,230 |
Single filer, all wages earned in Indiana, 2026 state tax rules, standard deductions. State income tax includes Indiana's average county income tax, which nonresidents pay to the county where they work. Other local income taxes are not included.
What to do
- Ask your employer to withhold Indiana tax. If Illinois's tax is higher, withhold the difference for Illinois too (or make estimated payments) to avoid an underpayment penalty.
- File the Indiana nonresident return first, then claim the credit for taxes paid to another state on your Illinois resident return.
- Keep a record of the days you work in each state, especially if you sometimes work from home.
Local income taxes
- Indiana: Every Indiana county levies a local income tax. Indiana residents pay the rate of the county they live in on January 1. People who live in another state pay the tax of the Indiana county where they principally work on January 1, and that includes residents of reciprocity states (KY, MI, OH, PA, WI) who file Form WH-47: the reciprocity agreements cover only the state tax.
Special credit rules
- IN: Reverse-credit arrangements (notably AZ, CA, OR): IN nonresidents from those states claim credit on the IN nonresident return. Separately, IN county income tax is owed by nonresidents on IN-sourced wages (county of principal employment).
Frequently asked questions
Do I pay Indiana income tax if I live in Illinois?
Yes. Indiana taxes wages earned there by nonresidents. On $100,000 that's about $4,554.
Do I have to file taxes in both Illinois and Indiana?
Usually yes: a nonresident return in Indiana and a resident return in Illinois, where you claim a credit for the tax paid to Indiana. File the Indiana return first.
Will I be taxed twice?
Not on the same state-level wages. Illinois credits the tax you pay Indiana, so your total is about $4,805 on $100,000, compared with $4,805 if you also worked in Illinois. Local city or county taxes may still apply.
Related
- Live in Indiana, work in Illinois
- Moving from Illinois to Indiana
- Moving from Indiana to Illinois
- Live in Illinois, work in Iowa
- Live in Illinois, work in Kentucky
- Live in Illinois, work in Missouri
- Live in Illinois, work in Wisconsin
Rules reviewed 2026-09-24 from state revenue departments and the Tax Foundation. Estimates only; confirm with each state's revenue department.