Live in Indiana, work in Illinois
No reciprocity: file the work-state nonresident return and Indiana resident return. The Indiana state-tax credit is capped at Indiana state tax; Indiana county tax remains. Any credit for out-of-state local tax is separate and not modeled.
Official tax guidance for both states
Check withholding, filing requirements and current forms with each state's tax agency.
- Indiana: Indiana Department of Revenue (opens in new tab)
- Illinois: Illinois Department of Revenue - Businesses (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 Indiana, ordinary employee wages and all workdays physically in Illinois. 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: $6,439 a year
Modeled annual state income tax for living in Indiana and working in Illinois: about $6,439 on $100,000 of wages, $1,885 more than if you worked in Indiana.
- Indiana's county component uses an illustrative 1.65% average, not your actual January 1 residence-county rate; local credits are not calculated.
No reciprocity: file the work-state nonresident return and Indiana resident return. The Indiana state-tax credit is capped at Indiana state tax; Indiana county tax remains. Any credit for out-of-state local tax is separate and not modeled.
Tax guide and official sources: live in Indiana, work in Illinois
Official agency starting points: Indiana tax agency (opens in new tab) · Illinois 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 | Illinois work state | Indiana home state |
|---|---|---|
| Tax before the modeled other-state credit | $4,805 | $4,554 |
| Modeled other-state credit subtracted | $0 | $2,921 |
| Tax after that credit | $4,805 | $1,634 |
Total: $4,805 + $1,634 = $6,439 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 Indiana, 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 IL | To IN | Modeled total | If you worked in IN |
|---|---|---|---|---|
| $50,000 | $2,330 | $809 | $3,139 | $2,254 |
| $75,000 | $3,568 | $1,221 | $4,789 | $3,404 |
| $100,000 | $4,805 | $1,634 | $6,439 | $4,554 |
| $150,000 | $7,280 | $2,459 | $9,739 | $6,854 |
| $250,000 | $12,230 | $4,109 | $16,339 | $11,454 |
Single filer, all wages earned in Illinois, 2026 state tax rules, standard deductions. State income tax includes Indiana's average county income tax. Other local income taxes are not included.
From paycheck withholding to your returns
- Withholding: Indiana and Illinois do not have wage reciprocity. Illinois income-tax withholding is normally needed. Indiana county liability remains; check Indiana withholding or estimated payments with payroll.
- Returns: Prepare Illinois IL-1040 with Schedule NR, then Indiana IT-40 with the applicable other-state credit schedule. IL-W-5-NR is not an exemption for Indiana residents.
- Credit or refund: Indiana's other-state credit offsets Indiana state tax, not county tax. A separate county credit requires qualifying tax paid to an out-of-state locality; this example has none. The county estimate uses 1.65%, not your actual January 1 county rate.
Worked example: $100,000 of wages
Single filer, full-year resident of Indiana, all work performed in Illinois, no other income, standard deductions and modeled personal exemptions. Before credit, Indiana tax is $4,554. Modeled Indiana credit: $2,921. Pay $4,805 to Illinois and $1,634 to Indiana, modeled total $6,439.
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. Other local income taxes are not included.
Remote-work and local exceptions
Illinois-source wages and days worked must be checked separately if you work from home in Indiana. This example assumes every workday is in Illinois. It does not model a split-location year or local-credit eligibility.
Official forms and instructions
- Illinois Schedule NR and reciprocity states (Publication 119) (opens in new tab)
- Indiana state and county credits (Bulletin 28) (opens in new tab)
- Indiana current county rates (Notice 1) (opens in new tab)
- Indiana individual forms (opens in new tab)
Source audit 2026-09-30. 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.
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 Illinois income tax if I live in Indiana?
Yes. Illinois taxes wages earned there by nonresidents. On $100,000 that's about $4,805.
Do I have to file taxes in both Indiana and Illinois?
Prepare Illinois IL-1040 with Schedule NR, then Indiana IT-40 with the applicable other-state credit schedule. IL-W-5-NR is not an exemption for Indiana residents.
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. Indiana credits the tax you pay Illinois, so your total is about $6,439 on $100,000, compared with $4,554 if you also worked in Indiana. Local city or county taxes may still apply.
Related
- Live in Illinois, work in Indiana
- Moving from Indiana to Illinois
- Moving from Illinois to Indiana
- Live in Indiana, work in Kentucky
- Live in Indiana, work in Michigan
- Live in Indiana, work in Ohio
Rules reviewed 2026-09-24 from state revenue departments and the Tax Foundation. Estimates only; confirm with each state's revenue department.