Live in Illinois, Work Remotely for a New Hampshire Employer: Who Taxes You?
Answer
One state, one return: Illinois. New Hampshire has no wage income tax, so working there changes nothing about what you owe. Your Illinois resident return reports the New Hampshire income along with everything else, and there is no credit to claim because New Hampshire charged you nothing.
Last verified
The instinct that working in a no-tax state means paying no tax is the single most expensive misunderstanding in this niche. New Hampshire takes nothing, but Illinois still taxes residents on income earned anywhere, so the full amount lands on your Illinois return.
What you file
- 1Resident return · Illinois
File a Illinois resident return reporting all of your income.
The two states, side by side
| Illinois | New Hampshire | |
|---|---|---|
| Taxes wages | Yes — flat | No |
| Reciprocity partners | 4 (Form IL-W-5-NR) | None |
| Convenience rule | No | No |
| Nonresident return | Form IL-1040 with Schedule NR | Not applicable |
| Credit for other-state tax | Schedule CR | No income tax |
| Nonresident safe harbour | 30 days | Not applicable |
| Local income tax | No | No |
| Revenue department | Illinois Department of Revenue | New Hampshire Department of Revenue Administration |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in New Hampshire and working in Illinois gives:No state income tax on your wages.
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 → New HampshireHome state only
- 1099 contractor: Illinois → New HampshireHome state only — estimated payments
- Moved mid-year: Illinois → New HampshireOne part-year return — the state you left
Other Illinois pairs
Questions people actually ask
I live in Illinois and work remotely for a New Hampshire employer. Which state do I pay?
One state, one return: Illinois. New Hampshire has no wage income tax, so working there changes nothing about what you owe. Your Illinois resident return reports the New Hampshire income along with everything else, and there is no credit to claim because New Hampshire charged you nothing.
Which state should my employer be withholding for?
Illinois. Your employer should withhold Illinois tax rather than New Hampshire tax on these wages. If a New Hampshire line is showing on your pay stub, raise it with payroll now rather than at filing time.
How current is this?
The Illinois and New Hampshire rules on this page were last checked against Illinois Department of Revenue and New Hampshire Department of Revenue Administration 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
- New Hampshire Department of Revenue Administration — individual income taxaccessed 2026-08-07