Live in Illinois, Work Remotely for a Texas Employer: Who Taxes You?
Answer
Only Illinois taxes you. Texas levies no personal income tax on wages, so nothing is withheld there and you file no Texas return. Illinois taxes its residents on all income wherever earned, which means your Texas earnings go on a Illinois resident return in full.
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 Texas 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 | Texas | |
|---|---|---|
| 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 | Texas Comptroller of Public Accounts |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Texas 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 → TexasHome state only
- 1099 contractor: Illinois → TexasHome state only — estimated payments
- Moved mid-year: Illinois → TexasOne part-year return — the state you left
Other Illinois pairs
Questions people actually ask
I live in Illinois and work remotely for a Texas employer. Which state do I pay?
Only Illinois taxes you. Texas levies no personal income tax on wages, so nothing is withheld there and you file no Texas return. Illinois taxes its residents on all income wherever earned, which means your Texas earnings go on a Illinois resident return in full.
Which state should my employer be withholding for?
Illinois. Your employer should withhold Illinois tax rather than Texas tax on these wages. If a Texas line is showing on your pay stub, raise it with payroll now rather than at filing time.
How current is this?
The Illinois and Texas rules on this page were last checked against Illinois Department of Revenue and Texas Comptroller of Public Accounts 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
- Texas Comptroller of Public Accounts — individual income taxaccessed 2026-08-07