Live in Indiana, work in Illinois
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 Indiana and working in Illinois, you'd pay about $4,805 in state income tax on $100,000 of wages, $251 more than if you worked 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 tax at different salaries
| Wages | To IL | To IN | Total | If you worked in IN |
|---|---|---|---|---|
| $50,000 | $2,330 | $0 | $2,330 | $2,254 |
| $75,000 | $3,568 | $0 | $3,568 | $3,404 |
| $100,000 | $4,805 | $0 | $4,805 | $4,554 |
| $150,000 | $7,280 | $0 | $7,280 | $6,854 |
| $250,000 | $12,230 | $0 | $12,230 | $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.
What to do
- Ask your employer to withhold Illinois tax. If Indiana's tax is higher, withhold the difference for Indiana too (or make estimated payments) to avoid an underpayment penalty.
- File the Illinois nonresident return first, then claim the credit for taxes paid to another state on your Indiana 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 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?
Usually yes: a nonresident return in Illinois and a resident return in Indiana, where you claim a credit for the tax paid to Illinois. File the Illinois return first.
Will I be taxed twice?
Not on the same state-level wages. Indiana credits the tax you pay Illinois, so your total is about $4,805 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.