All Things Tax

All Things Tax

Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.

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Pioneer
Posts: 2
Registered: ‎02-02-2017

Filing taxes in a state I didn't live or work

I lived in Iowa and worked in Illinois in 2016. In that year, I ended up moving to Illinois. I still had taxes taken out of my check for Iowa untill the end of 2016. Beginning 2017 everything got changed to Illinois only. But for some stupid reason, it is using the last week of 2016 on my 2017 taxes (maybe because I was paid for that last week in 2017?) and it still had IA on that last week. Now I have an Iowa W-2 as well as an Illinois W-2 even though I only lived in Illinois all year. How do I go about filing that? I really don't want to have to go into the office, I had to last year and it was a giant train wreck, the agent helping us wasn't great and it was crazy expensive. I just want to file online.

Associate (Pioneer)
Posts: 47
Registered: ‎11-25-2014

Re: Filing taxes in a state I didn't live or work

Hello, 

Welcome to the community.  As I understand you have received a W2 for that single week of wages (yes, W2's are issued on the check date, thus a 2017 W2).  You have to determine if you even have a filing requirement with Iowa.  A tax return is required from a non resident if their earnings are more than 1,000.00 This is the first thing you can verify.  If indeed your earnings on that W2 are less than the 1,000, you really don't need to file.  You will miss out on any refund of taxes withheld, but depending on the amount of tax, it may not be worth the headache.  Otherwise, I believe the online software would allow you to prepare two state returns.  You would prepare the Iowa return including only the income on that W2 as a non resident, and verify what tax liability you would have in that state; then prepare your Illinois return with all income included and apply for a credit for the tax paid to Iowa.  Let's see if that helps you navigate through the system.  I look forward to a response so I can assist you further. 

 

 

Tax Pro
Posts: 6,039
Registered: ‎02-23-2016

Re: Filing taxes in a state I didn't live or work

Hi agreenway,

 

 

 

Welcome to the H&R Block community.

 

The good news here is that Illinois and Iowa have a reciprocity agreement.  This means that you only pay taxes in your state of residence.

 

For 2017 all you need to do is report all of your income, meaning 100% of it, to Illinois.  File an Iowa non-resident tax return to get a refund of any Iowa withholdings.

 

For 2016 it's a little bit more complicated since you'll have a part-year return for each state.  We have to figure out how much income should have been reported to Iowa.  Your last paystub received while you were in Iowa should show your year-to-date income up to the point of your move.  All income received before the move should be reported to Iowa on a part-year resident tax return.

  • You'll need to report the remaining Iowa income and withholdings from your W-2 as a non-resident to get a refund of those withholdings.
  • All income received after the date of the move should reported to Illinois on a part-year resident tax return.

 

You can do all of this in the tax software.  The 2017 online software can do both states in addition to your federal return and it will be really easy.  2017 might even be free or close if your return is simple enough.  For 2016, if you haven't already done that one, you'll need the 2016 software for each state, but you'll need to download the federal software first.

 

The exemption form that you should provide your employer with so that they don't withhold tax for both states depends on which state you work in.  If you live in Illinois and work in Iowa then it's a Form 44-016.  If you live in Iowa and work in Illinois it's a Form IL-W-5-NR.

 

 

If you have any other questions I'll be glad to help.

 

Louis,

Senior Tax Advisor (Tampa, FL)