2026 tax year · cross-border wages
Crossing a state line into or out of Illinois
Illinois taxes its residents on income earned anywhere, and taxes non-residents on work done inside it. Which return you file depends on which direction you commute.
Illinois borders 6 states. They fall into 2 different situations, and which one applies decides whether you file one return or two.
Where Illinois has a reciprocity agreement
Illinois has wage reciprocity with Iowa, Kentucky, Michigan and Wisconsin. Work in one of these and it will not tax your wages at all: you file its exemption certificate with your employer there, which stops its withholding, and report everything to Illinois. There is no nonresident return.
| Work state | Exemption certificate | Its tax on your wages |
|---|---|---|
| Iowa | not in the 2026 dataset, ask the state | $0 |
| Kentucky | 42A809 | $0 |
| Michigan | MI-W4 | $0 |
| Wisconsin | W-220 | $0 |
Kentucky attaches conditions to its agreements, not all of which apply to every partner state: Virginia residents must commute daily; Ohio residents cannot own 20%+ of an S corporation. Check which clause covers an Illinois resident before relying on it.
Reciprocity covers wages paid by an employer. It does not cover self-employment income, so a 1099 worker in Illinois generally still sources income to where the work was done.
Where you file a nonresident return and claim a credit
Illinois has no agreement with Indiana and Missouri. Work in one of these and you file a nonresident return there, report the same income again to Illinois, and claim a credit for what you already paid. The credit is capped at your Illinois liability, so you are not taxed twice, the combined bill lands at roughly the higher of the two rates.
| Work state | Its tax | Illinois after credit | Total | Rate that governs |
|---|---|---|---|---|
| Indiana | $2,065 | $1,400 | $3,465 | Illinois |
| Missouri | $3,190 | $275 | $3,465 | Illinois |
What Illinois itself takes across a salary range
A single filer, taking the standard deduction. This is the figure every arrangement above is measured against, the tax Illinois charges a resident, whether the work happened inside the state or over a line:
| Wages | Illinois tax | Effective rate |
|---|---|---|
| $45,000 | $2,228 | 4.95% |
| $70,000 | $3,465 | 4.95% |
| $120,000 | $5,940 | 4.95% |
What Illinois charges as your home state
Illinois applies a single 4.95% rate to taxable income for 2026, so every extra dollar of wages is taxed at the same state rate.
State income tax on wages only, 2026 rates. Not tax advice, what this does and doesn't cover.