Live in Illinois, Work in Idaho: Which State Taxes Your Paycheck?
Answer
Both states tax the same wages, and a credit undoes the overlap. Idaho withholds as your work state and you file a Idaho nonresident return; Illinois taxes residents on all income, so you also file at home and claim the credit for tax paid to Idaho. File Idaho first.
Last verified
Without an agreement between Illinois and Idaho, the overlap is handled after the fact rather than prevented. That is why the filing order matters: the Idaho figure is an input to the Illinois return, so completing Illinois first means doing it twice.
A Illinois resident taxed by another state on the same income claims the credit for taxes paid to other states on Schedule CR. The credit is capped at the Illinois tax on that income, so it removes the double tax but never refunds the excess when the other state charges more.
What you file
- 1Nonresident return · IdahoForm 43
File the Idaho nonresident return FIRST — you need the Idaho tax figure before you can complete Illinois.
- 2Resident return · IllinoisSchedule CR
File a Illinois resident return reporting all income, then claim the credit for tax paid to Idaho. The credit is capped at what Illinois would have charged on that same income, so if Idaho taxes it at a higher rate the difference is not refunded.
The two states, side by side
| Illinois | Idaho | |
|---|---|---|
| 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 43 |
| Credit for other-state tax | Schedule CR | Form 39NR |
| Nonresident safe harbour | 30 days | None published |
| Local income tax | No | No |
| Revenue department | Illinois Department of Revenue | Idaho State Tax Commission |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Idaho and working in Illinois gives:Both states — credit offsets the double tax.
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.
- Remote worker: Illinois → IdahoHome state only
- 1099 contractor: Illinois → IdahoHome state, plus the client state if you work there
- Moved mid-year: Illinois → IdahoTwo part-year returns
Other Illinois pairs
Questions people actually ask
I live in Illinois and work in Idaho. Which state takes the tax out of my paycheck?
Both states tax the same wages, and a credit undoes the overlap. Idaho withholds as your work state and you file a Idaho nonresident return; Illinois taxes residents on all income, so you also file at home and claim the credit for tax paid to Idaho. File Idaho first.
Which state should my employer be withholding for?
Idaho. The wages are sourced to Idaho, so Idaho withholding is correct and there is no Illinois withholding to set up.
Will I end up paying tax twice on the same income?
Not twice over, but you will pay the higher of the two rates. Illinois gives residents a credit for tax paid to Idaho on the same income, claimed on Schedule CR. The credit is capped at the Illinois tax on that income, so if Idaho taxes it more heavily the excess is not refunded by either state.
How current is this?
The Illinois and Idaho rules on this page were last checked against Illinois Department of Revenue and Idaho State Tax Commission 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
- Idaho State Tax Commission — individual income taxaccessed 2026-08-07