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Any IL preparers on here?

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Over on the reddit tax forum, an IL W2 employee is saying that IL is not allowing him credit for taxes paid to other states because "I take direction from my employer's office in IL and my base of operations is IL." He has attempted to amend the returns to claim the credit but IL is fighting him on it.

Any insights would be appreciated!

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"I take direction from my employer's office IL and my base of operations in IL" This sound more like IL source income.  More facts please.

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To start with why is this person filing taxes in other states. Is it because this income is sourced in other states, if that is not the case then all income should be reported in IL

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TP home base is IL, therefore all his income should be subject to IL state tax, he needs to amend all the other state returns, get his money back and pay it to IL.  Now if he had offices in the other states he filed, show proof of a business license, lease etc....  the state of IL would definitely give him credit, because that is income he earned in a different earned in a different state, the 1099 would probably show a different address.

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Edit:

At first I had only read his question and assumed he was self-employed, but in his follow up responses I notice he works for an employer in IL, but if the employer is withholding taxes for the different states, then he should be entitled to the credit, however IL has reciprocal state tax agreement with IA, KY, MI & WI, if the employee were to work in any of these states, he would still pay IL tax rate even though he already had withholdings, for example if WI tax rate is 3% and IL tax rate is 5%, he would pay an additional 2% to IL.

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In what state does this client live?  The way I understand it only the resident state gives you credit for taxes paid to other states (because the resident state taxes you on all your income).  If you file a nonresident return, you only pay tax on the income earned in the nonresident state (so of course there is no credit).

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Hey guys,

I am a consultant who is a resident of IL and travels frequently to other states. Come tax time, I am required to file as a non-resident in those other states and as a resident in IL.  Correct

My issue is, when I file as a non-resident in those other states, those other states are not giving me dollar for dollar back. On top of that, IL says I cannot claim a credit for taxes paid to those other states (Schedule CR Form) because my base of operations is IL and I take direction from my company's office in IL.  Non-resident sates are not going to refund 100% of the state withholdings, you have to pay something because you earned wages in different states.

If you are following me, you can see I am essentially getting taxed twice on the same income: first by the non-resident state and second by IL.  Your not, IL should give you a credit for taxes paid to another state, however if the rate is lower then IL, you will owe the difference, but the state of IL is not going to refund you the taxes paid to another state either.

I understand IL is a full reporting state but how can I get around the double taxation that I have been losing out to for so long?

Appreciate any input!

I don't think the person who posted the question is a tax professional and if probably preparing his own taxes returns.

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