Question

I reside in Ohio and my company (also in Ohio) pays me to work on-site for a customer in Illinois

Forum|Forum|1 year ago
December 19, 2024
2 replies
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I reside in Ohio, I have a drivers license there and the company I work for is in Ohio. The company has had me traveling to Illinois for the last 2-3 years. They pay me as if I am in Ohio, additionally I also get lodging and food money back. This last year I decided to rent an apartment. I am not sure how to do my taxes. Do I need to claim the apartment? Do I also need to file in Illinois even thought the company I work for is paying me directly from Ohio to be on-site in Illinois?

Multiple States

Hal_Al

Q. Do I need to claim the apartment?

A. No. As a W-2 employee, you are not allowed(since the 2018 tax law) any business deductions. However, your employer as allowed to reimburse you on a tax free basis. (under an "accountable plan")

Q. Do I also need to file in Illinois even thought the company I work for is paying me directly from Ohio to be on-site in Illinois?

A. Yes, since you physically work in IL. The apartment is irrelevant, you should have been filing an IL non resident return for the last 2-3 years. You also file an Ohio resident return and pay OH tax on all your income, regardless of where earned. OH will give you a credit (or partial credit if IL has a higher tax rate) for the tax you pay to IL.

rjs

"They pay me as if I am in Ohio"

That's wrong. You work in Illinois, not in Ohio. It doesn't matter that your employer's headquarters or payroll office is in Ohio. They should be withholding Illinois tax, and box 15 on your W-2 should say IL. If you file your tax returns properly, you will pay most of your tax to Illinois and very little, if any, to Ohio.

If your employer will not withhold Illinois tax, you should be making quarterly estimated tax payments to Illinois.

"additionally I also get lodging and food money back"

How do you get the lodging and food money? Is it a fixed amount, or do you report your actual expenses to your employer? Do you get a separate check for expenses or is it included in your pay?

If the reimbursement is paid through an accountable plan you don't put it on your tax return, and you don't pay tax on it. The plan would have to be established by your employer. An accountable plan would generally require you to submit expense reports with receipts, but that might not be required if the plan meets the requirements for per diem reimbursement. Reimbursement from an accountable plan would not be included in the amount on your W-2.

If the reimbursement is not through an accountable plan, it's just additional pay, no matter what the employer calls it. It should be included in the wages on your W-2 and you pay tax on it the same as any other pay.

N

Natalie02dAuthor

Thanks you for the info!

To answer your question, yeah it is a fixed amount and they do pay it separately. My paycheck pays out every other week and when I turn in my service sheet (at the end of the month when I travel back home) they reimburse the over nights. I do not need to provide receipts expect for gas.

Also, I checked out my W-2 from last year and my pay stubs. There isn’t anything pulled out for Illinois, only taxes for the school district I live in, the town where the company is located and Ohio state tax.

Do I need to contact my company with this info and request a new W-2 for the last years? Or am I supposed to file separately in Turbo tax after I receive my W-2?

T

TomD8

Q. Do I need to contact my company with this info and request a new W-2s for the last years, showing IL income?

A. No. It's your responsibility to pay the IL tax by filing an IL non resident return. You do not need a corrected W-2 from your employer to do so. But, it would be helpful, particularly with the OH amended returns.

Q. Or am I supposed to file IL, separately, in Turbo tax after I receive my W-2?

A. Yes. You can add the IL software to your TurboTax account.

You indicate you are paying City income tax for "the town where the company is located". If your employer is withholding city income tax on all your salary, for the year, you are actually entitled to a refund of the city tax paid on the salary allocated to IL (if you actually end up paying IL tax). This assumes you don't also live in the city where the company is located. This usually requires a special form from the city income tax dept.

School Tax does not work the same way. You owe school income tax on all your income, regardless of where you work, because you live in that school district.

As @Hal_Al stated in an earlier response, you must file two state tax returns: a non-resident Illinois state tax return and a resident Ohio state tax return. The issue for state tax purposes is where you live and where you work. The location of your employer's home office is irrelevant.

Illinois can tax the income you earn from work you carry out within Illinois; Ohio can tax all your income, including that from Illinois. You will be able to claim an "other state credit" on your Ohio return for the tax you pay to Illinois. The credit prevents double taxation of the same income.

With TurboTax, you must complete the non-resident state return before you do your home state return, so that the program can calculate and apply the credit.

If you worked both in and out of Illinois during the tax year, then you must calculate the Illinois portion of your income if your employer does not do that for you.

Going forward, if you continue to work in Illinois and your employer does not withhold Illinois income tax from your pay, then you must make quarterly estimated tax payments to Illinois. You can make those payments (if necessary) online here:

https://tax.illinois.gov/individuals/pay.html

**Answers are correct to the best of my ability but do not constitute tax or legal advice.