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Jack from Ohio

Illinois resident, tax on foreign income

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Client has a domicile address in Illinois for several years. (His brother's address)

Client is a resident alien, with SS#.

Client has lived overseas for the last 6 years, with only a few days in the U.S.  He qualified for the foreign income exemption on his Fed 1040.

Client filed 2017 1040 and paid the taxes due.  All his income was from foreign sources.

While he has lived overseas, since 2013, he has never file Illinois State tax return, under the guise that, his income did not come from any IL sources.

Now the question.  For the first time since 2013, IL sent a notice requesting an IL form to be filed, and tax paid.

Does IL tax income from foreign sources?  If there is an exclusion, where do you enter it?

This is the first time I have dealt with an issue like this.  Any IL preparers have any insight for me?

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Can't help you with Illinois, but I have a client who is domiciled in CA, lives and works in China.   Every year we file a CA return because CA does not conform to Foreign Income Exclusion and CA taxes worldwide income earned by domiciled residents of the state.   $0 Federal Tax.   Check to CA every year.  

Tom
Modesto, CA

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IL income tax is based on Federal AGI, if by any chance there was some AGI in 2013, the state of IL is one of those states that communicates with the IRS.  

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Would it help to write a letter stating these facts?  Domicile actually in China/India/Timbuktu/New Zealand/whatever, uses brother's address as a convenience due to difficulties in receiving mail at legal residence.  Any proofs of same (details from FEI form, pay statements from Acme of India Pvt Ltd, Wile E Coyote CEO, scan of envelope for electric bill from Christchurch Electric Power, other) to placate Illinois.  

However, if this guy really has a *domicile* in Illinois (rather than merely a mail drop), then you have to look at what the state will tax.

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