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Live in Illinois, Work in Massachusetts: Which State Taxes Your Paycheck?

Both states — credit offsets the double taxMassachusetts withholds

Answer

Both states tax the same wages, and a credit undoes the overlap. Massachusetts withholds as your work state and you file a Massachusetts nonresident return; Illinois taxes residents on all income, so you also file at home and claim the credit for tax paid to Massachusetts. File Massachusetts first.

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Two states can lawfully tax the same wages: Massachusetts because the work happened there, Illinois because you live there. Nothing prevents the overlap in advance — it is unwound afterwards, on the Illinois return, through the credit for taxes paid to another state.

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

  1. 1Nonresident return · MassachusettsForm 1-NR/PY

    File the Massachusetts nonresident return FIRST — you need the Massachusetts tax figure before you can complete Illinois.

  2. 2Resident return · IllinoisSchedule CR

    File a Illinois resident return reporting all income, then claim the credit for tax paid to Massachusetts. The credit is capped at what Illinois would have charged on that same income, so if Massachusetts taxes it at a higher rate the difference is not refunded.

The two states, side by side

 IllinoisMassachusetts
Taxes wagesYes — flatYes — flat
Reciprocity partners4 (Form IL-W-5-NR)None
Convenience ruleNoNo
Nonresident returnForm IL-1040 with Schedule NRForm 1-NR/PY
Credit for other-state taxSchedule CRSchedule OJC
Nonresident safe harbour30 daysNone published
Local income taxNoNo
Revenue departmentIllinois Department of RevenueMassachusetts Department of Revenue
Last verified

The other direction

Reversing the commute does not always reverse the answer. Living in Massachusetts and working in Illinois gives:Both states — credit offsets the double tax.

Massachusetts to Illinois →

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.

Other Illinois pairs

Questions people actually ask

I live in Illinois and work in Massachusetts. Which state takes the tax out of my paycheck?

Both states tax the same wages, and a credit undoes the overlap. Massachusetts withholds as your work state and you file a Massachusetts nonresident return; Illinois taxes residents on all income, so you also file at home and claim the credit for tax paid to Massachusetts. File Massachusetts first.

Which state should my employer be withholding for?

Massachusetts. The wages are sourced to Massachusetts, so Massachusetts 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 Massachusetts on the same income, claimed on Schedule CR. The credit is capped at the Illinois tax on that income, so if Massachusetts taxes it more heavily the excess is not refunded by either state.

How current is this?

The Illinois and Massachusetts rules on this page were last checked against Illinois Department of Revenue and Massachusetts 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.