Live in Washington, Work Remotely for a Illinois Employer: Who Taxes You?
Answer
Illinois cannot follow the paycheck home. Because Illinois sources wages to the place of performance and you perform them in Washington, the income is Washington-source; and Washington does not tax wages. The result is no state income tax on these earnings at all.
Last verified
An employer's address is not a tax nexus for its employees. Working from Washington keeps the income Washington-source, and since Washington levies no tax on wages, the income lands nowhere at all.
What you file
There is nothing to file in either Washington or Illinois on these wages. Your federal return is unaffected — the federal government taxes the income whatever the states do.
The two states, side by side
| Washington | Illinois | |
|---|---|---|
| Taxes wages | No | Yes — flat |
| Reciprocity partners | None | 4 (Form IL-W-5-NR) |
| Convenience rule | No | No |
| Nonresident return | Not applicable | Form IL-1040 with Schedule NR |
| Credit for other-state tax | No income tax | Schedule CR |
| Nonresident safe harbour | Not applicable | 30 days |
| Local income tax | No | No |
| Revenue department | Washington State Department of Revenue | Illinois Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Illinois and working in Washington 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: Washington → IllinoisWork state only
- 1099 contractor: Washington → IllinoisClient state only, if you work there
- Moved mid-year: Washington → IllinoisOne part-year return — the state you moved to
Other Washington pairs
Questions people actually ask
I live in Washington and work remotely for a Illinois employer. Which state do I pay?
Illinois cannot follow the paycheck home. Because Illinois sources wages to the place of performance and you perform them in Washington, the income is Washington-source; and Washington does not tax wages. The result is no state income tax on these earnings at all.
Which state should my employer be withholding for?
Neither. There is no state income tax to withhold on either side of this pairing, so a state line on your pay stub for Washington or Illinois is an error worth querying.
Does my Illinois employer's location alone create a Illinois tax obligation?
No. Illinois 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 Illinois are a different matter — those are Illinois-source income and can require a nonresident return.
How current is this?
The Washington and Illinois rules on this page were last checked against Washington State Department of Revenue and Illinois 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.
- Washington State Department of Revenue — individual income taxaccessed 2026-08-07
- Illinois Department of Revenue — individual income taxaccessed 2026-08-07