State income tax question

[MamaMaui24]

I live in TX, but my job and paycheck are based out of Illinois. (I work remotely 100% of the time.)

TX does not have state income tax.
Illinois does.

I started 12/1/15, so I'm not sure there was enough income for it to matter for 2015.

Will I owe Illinois state tax for 2016?

Our HR system just updated and this paycheck was the first to withhold Illinois state tax from my paycheck.

I'll check with my coworkers/HR tomorrow but I wanted to ask! TIA!

[LoveTrains]

I'm not an expert on IL but my H works for a MA company and works remotely and he pays MA income tax. We get a credit for it when we file RI taxes.

[tealblue]

I'm not an expert on IL taxes but based on this article below one of the comments addresses your issue. If true, it sounds like IL will tax you on your income earned as a non resident . Non resident rates are typically Lower than resident tax rates. You'll have to research IL law though to double check.

www.city-data.com/forum/work-employment/1913100-working-remotely-different-state-state-would.html

[dirtyred]

Yes.  You pay income tax to the state in which you earn the income.

[Deleted]

Jul 6, 2016 6:10:46 GMT -5 dirtyred said:

Yes.  You pay income tax to the state in which you earn the income.

This is not a blanket rule. It varies by state.

[genet313]

We work in NY, live in NJ.  We pay NY state and NYC city tax, but get a refund every year from both and subsequently pay it over to NJ.   This is very common where I live though, so pretty much every NY/NJ accountant is well versed in the procedures.

[mich1]

My disability payments came from my old job in KY, even though I had moved away and was a resident of WA.

I have to pay KY state taxes as a non resident.

[Deleted]

Interesting. My company is based out of Texas as our headquarters and I am paid from headquarters in TX. I pay the taxes for the state I live in (CA). I guess it's different when you remote in on a computer? Or perhaps it's simplified for me since TX doesn't have a state income tax?

[magdala]

Yes, you will have to pay non resident taxes if you meet their criteria:

Here are the rules/form for 2015. Similar forms will exist for 2016.
www.revenue.state.il.us/TaxForms/IncmCurrentYear/Individual/IL-1040-Schedule-NR-Instr.pdf www.revenue.state.il.us/TaxForms/IncmCurrentYear/Individual/IL-1040-Schedule-NR.pdf

[mich1]

Jul 6, 2016 10:33:06 GMT -5 @lemonlover said:

Interesting. My company is based out of Texas as our headquarters and I am paid from headquarters in TX. I pay the taxes for the state I live in (CA). I guess it's different when you remote in on a computer? Or perhaps it's simplified for me since TX doesn't have a state income tax?

It's probably more that TX does not have a state tax.

[kershnic]

Jul 6, 2016 9:09:37 GMT -5 genet313 said:

We work in NY, live in NJ.  We pay NY state and NYC city tax, but get a refund every year from both and subsequently pay it over to NJ.   This is very common where I live though, so pretty much every NY/NJ accountant is well versed in the procedures.

You actually pay NYC tax and then get a refund?  Out of I think 6 different employers in NYC we've had while living in NJ we've never had city tax withheld.  Weird.

[kershnic]

Jul 6, 2016 10:33:06 GMT -5 @lemonlover said:

Interesting. My company is based out of Texas as our headquarters and I am paid from headquarters in TX. I pay the taxes for the state I live in (CA). I guess it's different when you remote in on a computer? Or perhaps it's simplified for me since TX doesn't have a state income tax?

I live in NJ and our income comes from NY.  We have to file state taxes in both states.  NY tax is withheld from our NY paychecks and that money stays in NY.  When tax time rolls around we file NJ taxes and get a credit on our state taxes for the amount that we paid in NY.  If we owe more in NJ than the credit already paid to NY is then we have to pay NJ.  

So assuming that it works the same elsewhere, if your job is in TX where there is no state income tax, TX does not tax you and therefore no credit, but then CA taxes you on the full amount as you are a resident there.  In the reverse scenario the state where you earned the money could tax you and the state where you reside that has no income tax could just not care because they don't require state taxes.

[genet313]

Jul 6, 2016 12:11:44 GMT -5 kershnic said:

Jul 6, 2016 9:09:37 GMT -5 genet313 said:

We work in NY, live in NJ.  We pay NY state and NYC city tax, but get a refund every year from both and subsequently pay it over to NJ.   This is very common where I live though, so pretty much every NY/NJ accountant is well versed in the procedures.

You actually pay NYC tax and then get a refund?  Out of I think 6 different employers in NYC we've had while living in NJ we've never had city tax withheld.  Weird.

Yeah, I do -- I honestly don't know about DH, I suspect he doesn't, but I know I do b/c I've gotten the refund.  But my firm is completely stupid about any sort of accounting treatment, there's always something going wrong.  So I am not surprised to hear you've never paid it.  We pay both NY state and city and then get refunds.  I would complain but it's minimal work for my accountant, so I don't really care.  

[LoveTrains]

Jul 6, 2016 10:33:06 GMT -5 @lemonlover said:

Interesting. My company is based out of Texas as our headquarters and I am paid from headquarters in TX. I pay the taxes for the state I live in (CA). I guess it's different when you remote in on a computer? Or perhaps it's simplified for me since TX doesn't have a state income tax?

Texas doesn't have state income tax and you work at an office location in CA. It's a completely different scenario. 

[MamaMaui24]

Thanks, all. It was a mistake and my manager has updated my status so that my work state = TX. I'll also get a refund from the previously withdrawn taxes.