Live in Illinois, work in Indiana
Illinois and Indiana do not have wage reciprocity. Indiana taxes eligible Indiana work wages, with county tax depending on January 1 facts; Illinois may allow a limited credit for eligible state and county income tax.
Choose your next step
Payroll starting point: Indiana WH-4: withholding and January 1 county status (opens in new tab). Choose WH-4 in the official forms index, complete it for payroll and keep a copy. Illinois residence does not qualify for Indiana WH-47 reciprocity. Check January 1 principal-work-county and actual Indiana workdays.
Official tax guidance for both states
Check withholding, filing requirements and current forms with each state's tax agency.
- Illinois: Illinois Department of Revenue - Businesses (opens in new tab)
- Indiana: Indiana Department of Revenue (opens in new tab)
Agency directory checked 2026-10-01 against the IRS state-government directory. This verifies the agency links, not an individual tax result. Use forms for the year you are filing.
Before you use this estimate
This model assumes a full-year resident of Illinois, ordinary employee wages and all workdays physically in Indiana. Check exemption eligibility before treating a work-state amount of $0 as your own result. Withholding is a prepayment, not final tax liability. Other income, a move during the year, remote work and separate local taxes or credits can change the result.
State income tax: $4,805 a year
Modeled annual state income tax for living in Illinois and working in Indiana: about $4,805 on $100,000 of wages.
- Indiana's county component uses an illustrative 1.65% average, not your actual January 1 principal-work-county rate; local credits are not calculated.
Without wage reciprocity, the work state may tax wages earned there. Your home state generally offers a limited credit for eligible tax paid on the same income. Filing requirements, credit limits and local taxes need a separate check.
Tax guide and official sources: live in Illinois, work in Indiana
Official agency starting points: Illinois tax agency (opens in new tab) · Indiana tax agency (opens in new tab). These directory links identify the selected states' agencies, not your filing obligations. Check their individual-tax guidance and forms for the year you are filing.
This is the usual filing pattern, not a determination that you must file. Filing thresholds, age or dependent status, other income and withholding refunds can change which returns you need.
How this $100,000 estimate adds up
These steps follow the selected home, work state, salary and filing status. They reconcile the model's annual liability, not the amounts withheld from your paycheck.
| Step | Indiana work state | Illinois home state |
|---|---|---|
| Tax before the modeled other-state credit | $4,554 | $4,805 |
| Modeled other-state credit subtracted | $0 | $4,554 |
| Tax after that credit | $4,554 | $251 |
Total: $4,554 + $251 = $4,805 a year. Amounts are rounded for display. Work-state wage exemptions, when applicable, are already reflected in the first row; they are not an other-state credit.
The modeled credit is applied in Illinois, the home state. Actual eligibility and credit limits require the state instructions. Included county components stay in these amounts; excluded local taxes and credits stay excluded. Federal income tax, payroll programs and refund eligibility are outside this reconciliation.
State tax at different salaries
| Wages | To IN | To IL | Modeled 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.
From paycheck withholding to your returns
- Withholding: Give Indiana payroll WH-4, reporting January 1 residence and principal-employment county as its instructions require. WH-4 stays with the employer. For this full-year commuter example, assume more than 30 Indiana workdays and an Indiana principal workplace on January 1; check conditional short-term-worker rules before applying withholding to another pattern. Review Illinois withholding or estimated payments after the eligible resident credit; use IL-W-4 if Illinois withholding is being arranged.
- Returns: Prepare Indiana IT-40PNR and the applicable county schedule CT-40PNR first, using the filing-year required schedules and withholding statements. The current index identifies the mandatory 2025 packet; include Schedule IN-W and credit schedules as applicable. Then prepare Illinois IL-1040 with Schedule CR. Keep the completed Indiana return and use its actual tax figures; for a local-government credit, Illinois requires a local return or W-2 showing local wages as support. The linked annual forms are 2025 editions.
- Credit or refund: Illinois Schedule CR can include eligible income taxes paid to another state and its county or city; Indiana county tax is not automatically excluded. The credit is limited by Illinois’s calculation on the income also taxed there. Use the Indiana return and the filing-year Illinois comparison instructions rather than treating all W-2 withholding as tax paid. No credit above the applicable Illinois limit or a personal refund is calculated here.
Worked example: $100,000 of wages
Single filer, full-year resident of Illinois, all work performed in Indiana, no other income, standard deductions and modeled personal exemptions. Before credit, Illinois tax is $4,805. Modeled Illinois credit: $4,554. Pay $4,554 to Indiana and $251 to Illinois, modeled total $4,805.
Indiana’s county component uses an illustrative 1.65% average, not the actual January 1 principal-work-county rate. This displayed commuter case assumes more than 30 Indiana workdays and an Indiana principal workplace on January 1; short-term eligibility and county changes are not calculated. Annual-return links are 2025 editions; the county withholding notice checked is effective October 1, 2026.
Annual liability, not paycheck withholding or a refund estimate. Federal tax, payroll programs, other local taxes, special credits and part-year residency are excluded. 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.
Remote-work and local exceptions
The model assumes full-year Illinois residence, ordinary employee wages and all work physically in Indiana. Indiana county liability uses January 1 residence/principal-work facts; starting work later can change the county result. Indiana also has conditional rules for nonresidents working 30 days or less, including occupational exclusions and withholding documentation such as WH-4AFF. The calculator does not test those conditions or allocate hybrid days.
Lansing home, January 1 principal job in Lake County, Indiana
For a full-year Illinois resident whose principal job is in Lake County, Indiana on January 1 and who works there more than 30 days, keep evidence of both January 1 facts and the actual county withholding. Use that county’s applicable instructions instead of the calculator’s average. On Illinois Schedule CR, evaluate eligible Indiana state and county income tax with the required local-return or W-2 support; do not claim a second, unrestricted county credit.
Official forms and instructions
- Indiana WH-4 and WH-4AFF: official employer-certificate forms index (opens in new tab)
- Indiana Departmental Notice 1: January 1 county facts and withholding rules, effective October 1, 2026 (opens in new tab)
- Indiana Bulletin 28: nonresident income and conditional 30-day rules, December 2024 (opens in new tab)
- Indiana IT-40PNR / CT-40PNR and required schedules: 2025 annual forms index (opens in new tab)
- Illinois Schedule CR instructions: 2025 return, including local income taxes and support (opens in new tab)
- Illinois Publication 111: credit calculation and sourcing guidance (opens in new tab)
- Illinois IL-1040 / Schedule CR and 2026 estimated-payment forms index (opens in new tab)
- Illinois IL-W-4: official employer-submission instructions (opens in new tab)
Source audit 2026-11-02. Use the return and instructions for the year you are filing; a current-forms link may still show a prior-year return. Official sources checked; not independently reviewed.
Check your payslip and keep these records
- Compare the payroll certificate you supplied with the state withholding on your next payslip. Check city, county and school-district entries separately; a state exemption does not settle local tax.
- Keep your W-2 and other withholding statements, copies of payroll certificates, filed state and local returns, and proof of tax paid. A refund depends on actual withholding and the completed return, not this annual estimate.
- Keep an actual work-location log, including home-working days. This calculator assumes ordinary employee wages, full-year residence in Illinois and every workday physically in Indiana.
- If you moved during the year, have nonwage income or do not meet that scope, follow the pair's remote and local exceptions and the moving-year tax guide before using the amount as your own result. This tool does not calculate hybrid allocation, local credits or a personal refund.
What to do
- 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: Indiana county tax is separate from state wage reciprocity and state-tax credits. Another state's state-tax credit does not offset Indiana county tax; any eligible credit for out-of-state local tax is separate and is not modeled.
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?
Prepare Indiana IT-40PNR and the applicable county schedule CT-40PNR first, using the filing-year required schedules and withholding statements. The current index identifies the mandatory 2025 packet; include Schedule IN-W and credit schedules as applicable. Then prepare Illinois IL-1040 with Schedule CR. Keep the completed Indiana return and use its actual tax figures; for a local-government credit, Illinois requires a local return or W-2 showing local wages as support. The linked annual forms are 2025 editions.
Will I be taxed twice?
The modeled state credit reduces overlap on eligible wages; separate local taxes or sourcing differences can still leave additional tax. 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.