Live in Illinois, Work Remotely for a Louisiana Employer: Who Taxes You?
Answer
Illinois gets all of it. Because Louisiana does not tax wage income, no Louisiana withholding exists and no Louisiana return is required — but Illinois taxes residents on worldwide income, so every dollar earned in Louisiana still belongs on your Illinois resident return.
Last verified
Crossing into a state with no income tax does not lower your tax bill, because your home state is not taxing you on where you work — it is taxing you on where you live. Illinois reaches all of a resident's income, and Louisiana adds nothing on top.
What you file
- 1Resident return · Illinois
File a Illinois resident return reporting all of your income.
The two states, side by side
| Illinois | Louisiana | |
|---|---|---|
| Taxes wages | Yes — flat | Yes — flat |
| Reciprocity partners | 4 (Form IL-W-5-NR) | None |
| Convenience rule | No | No |
| Nonresident return | Form IL-1040 with Schedule NR | Form IT-540B |
| Credit for other-state tax | Schedule CR | Schedule G (Form IT-540) |
| Nonresident safe harbour | 30 days | None published |
| Local income tax | No | No |
| Revenue department | Illinois Department of Revenue | Louisiana Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Louisiana and working in Illinois gives:Home state only.
Same two states, different situation
The withholding answer turns on how you are paid and where the work happens, not only on which two states are involved.
- W-2 commuter: Illinois → LouisianaBoth states — credit offsets the double tax
- 1099 contractor: Illinois → LouisianaHome state, plus the client state if you work there
- Moved mid-year: Illinois → LouisianaTwo part-year returns
Other Illinois pairs
Questions people actually ask
I live in Illinois and work remotely for a Louisiana employer. Which state do I pay?
Illinois gets all of it. Because Louisiana does not tax wage income, no Louisiana withholding exists and no Louisiana return is required — but Illinois taxes residents on worldwide income, so every dollar earned in Louisiana still belongs on your Illinois resident return.
Which state should my employer be withholding for?
Illinois. Your employer should withhold Illinois tax rather than Louisiana tax on these wages. If a Louisiana line is showing on your pay stub, raise it with payroll now rather than at filing time.
Does my Louisiana employer's location alone create a Louisiana tax obligation?
No. Louisiana sources wages to the place where the work is physically performed, and it does not apply a convenience-of-the-employer rule that would override that. Days you actually spend working inside Louisiana are a different matter — those are Louisiana-source income and can require a nonresident return.
How current is this?
The Illinois and Louisiana rules on this page were last checked against Illinois Department of Revenue and Louisiana Department of Revenue on 2026-08-07. We re-check the full grid every December after state legislative sessions close, and re-check the convenience-of-the-employer states quarterly because that is where the rules move fastest.
Sources
Every fact above comes from the revenue department that publishes the rule. We do not cite secondary summaries, and we do not restate a figure we could not find at source.
- Illinois Department of Revenue — individual income taxaccessed 2026-08-07
- Louisiana Department of Revenue — individual income taxaccessed 2026-08-07