Live in Illinois, Work in Ohio: Which State Taxes Your Paycheck?
Answer
Both states tax the same wages, and a credit undoes the overlap. Ohio withholds as your work state and you file a Ohio nonresident return; Illinois taxes residents on all income, so you also file at home and claim the credit for tax paid to Ohio. File Ohio first.
Last verified
Without an agreement between Illinois and Ohio, the overlap is handled after the fact rather than prevented. That is why the filing order matters: the Ohio 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.
Ohio also has a layer below the state one, and it is the layer that survives every agreement: Ohio has the densest local income tax in the country: several hundred municipalities levy a municipal income tax, and many school districts levy their own on top. Neither is covered by the reciprocal agreements. A Pennsylvania resident working in Columbus pays no Ohio state tax and full Columbus city tax.
What you file
- 1Nonresident return · OhioForm IT 1040 with Schedule IT NRC
File the Ohio nonresident return FIRST — you need the Ohio 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 Ohio. The credit is capped at what Illinois would have charged on that same income, so if Ohio taxes it at a higher rate the difference is not refunded.
The two states, side by side
| Illinois | Ohio | |
|---|---|---|
| Taxes wages | Yes — flat | Yes — graduated |
| Reciprocity partners | 4 (Form IL-W-5-NR) | 5 (Form IT 4NR) |
| Convenience rule | No | No |
| Nonresident return | Form IL-1040 with Schedule NR | Form IT 1040 with Schedule IT NRC |
| Credit for other-state tax | Schedule CR | Ohio Schedule of Credits (resident credit) |
| Nonresident safe harbour | 30 days | None published |
| Local income tax | No | Yes |
| Revenue department | Illinois Department of Revenue | Ohio Department of Taxation |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Ohio 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 → OhioHome state only
- 1099 contractor: Illinois → OhioHome state, plus the client state if you work there
- Moved mid-year: Illinois → OhioTwo part-year returns
Other Illinois pairs
Questions people actually ask
I live in Illinois and work in Ohio. Which state takes the tax out of my paycheck?
Both states tax the same wages, and a credit undoes the overlap. Ohio withholds as your work state and you file a Ohio nonresident return; Illinois taxes residents on all income, so you also file at home and claim the credit for tax paid to Ohio. File Ohio first.
Which state should my employer be withholding for?
Ohio. The wages are sourced to Ohio, so Ohio 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 Ohio on the same income, claimed on Schedule CR. The credit is capped at the Illinois tax on that income, so if Ohio taxes it more heavily the excess is not refunded by either state.
How current is this?
The Illinois and Ohio rules on this page were last checked against Illinois Department of Revenue and Ohio Department of Taxation 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
- Ohio Department of Taxation — individual income taxaccessed 2026-08-07
- Ohio — Form IT 4NRaccessed 2026-08-07