Reciprocity state pair

Live in Illinois, work in Kentucky

Reciprocity agreement: covered employee wages are subject to state income tax only in your home state. Give your employer the work state's exemption form and arrange home-state withholding. County and city taxes require a separate check.

By Abu HasnatPage updated Nov 7, 2026Data: Illinois and Kentucky revenue departments (methodology)

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)
Kentucky: Kentucky 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 Kentucky. 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.

Wage-exemption conditions: An eligible IL resident who remains a Kentucky nonresident can claim the covered employee-wage exemption using the 2026 Kentucky K-4, reciprocal-state worksheet and box 4. Give the completed certificate to the Kentucky employer and keep a copy. Local occupational tax can still apply; check the actual workplace.

This pair's wage-exemption or credit guidance checked 2026-11-02. Individual return calculations and other source dates are separate.

I live inI work inAnnual wages ($)Filing status

State income tax: $4,805 a year

Modeled annual state income tax for living in Illinois and working in Kentucky: about $4,805 on $100,000 of wages.

Conditions for this pair: An eligible IL resident who remains a Kentucky nonresident can claim the covered employee-wage exemption using the 2026 Kentucky K-4, reciprocal-state worksheet and box 4. Give the completed certificate to the Kentucky employer and keep a copy. Local occupational tax can still apply; check the actual workplace.

Official guidance (revenue.ky.gov) (opens in new tab) · Official guidance (apps.legislature.ky.gov) (opens in new tab)

Tax guide and official sources: live in Illinois, work in Kentucky

Official agency starting points: Illinois tax agency (opens in new tab) · Kentucky 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.

Tax to Kentucky

nonresident

Tax to Illinois

$4,805

resident

Total state tax

$4,805

Typical state returns

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.

Modeled state income tax for Illinois residence and Kentucky work
Step	Kentucky work state	Illinois home state
Tax before the modeled other-state credit	$0	$4,805
Modeled other-state credit subtracted	$0	$0
Tax after that credit	$0	$4,805

Total: $0 + $4,805 = $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.

No other-state credit is subtracted in this selected scenario. 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 KY	To IL	Modeled total	If you worked in IL
$50,000	$0	$2,330	$2,330	$2,330
$75,000	$0	$3,568	$3,568	$3,568
$100,000	$0	$4,805	$4,805	$4,805
$150,000	$0	$7,280	$7,280	$7,280
$250,000	$0	$12,230	$12,230	$12,230

Single filer, all wages earned in Kentucky, 2026 state tax rules, standard deductions. Local income taxes not included.

What to do

Reciprocity: An eligible IL resident who remains a Kentucky nonresident can claim the covered employee-wage exemption using the 2026 Kentucky K-4, reciprocal-state worksheet and box 4. Give the completed certificate to the Kentucky employer and keep a copy. Local occupational tax can still apply; check the actual workplace.
Keep a record of the days you work in each state, especially if you sometimes work from home.

Local income taxes

Kentucky: City/county occupational license taxes are levied by work location on residents and nonresidents alike (e.g., Louisville Metro ~2.2% combined, Lexington 2.25%), and are NOT covered by KY's state reciprocity agreements - OH/IN commuters into Louisville/Covington still pay them.

Frequently asked questions

Do I pay Kentucky income tax if I live in Illinois?

If you qualify for the wage-reciprocity exemption, no Kentucky state income tax on covered employee wages: under reciprocity Illinois taxes them. City and county taxes require a separate check. An eligible IL resident who remains a Kentucky nonresident can claim the covered employee-wage exemption using the 2026 Kentucky K-4, reciprocal-state worksheet and box 4. Give the completed certificate to the Kentucky employer and keep a copy. Local occupational tax can still apply; check the actual workplace.

Do I have to file taxes in both Illinois and Kentucky?

Usually you file only one state return (a resident return in Illinois), though some states still require a nonresident return to get a refund of any wrongly withheld tax.

Will I be taxed twice?

Not at the state level on covered wages: under reciprocity Illinois taxes them, about $4,805 on $100,000 in this model. The estimate includes resident county tax where modeled; other local taxes or credits are separate.

Rules reviewed 2026-09-24 from state revenue departments and the Tax Foundation. Estimates only; confirm with each state's revenue department.