Live in Mississippi, Work in Illinois: Which State Taxes Your Paycheck?
Answer
You file twice: Illinois first, then Mississippi. There is no reciprocity agreement between these two states, so Illinois taxes the income where it was earned and Mississippi taxes it again as resident income — with the resident credit removing the double charge rather than an exemption form preventing it.
Last verified
Without an agreement between Mississippi and Illinois, the overlap is handled after the fact rather than prevented. That is why the filing order matters: the Illinois figure is an input to the Mississippi return, so completing Mississippi first means doing it twice.
A Mississippi resident taxed by another state on the same income claims the credit for taxes paid to other states on Form 80-160. The credit is capped at the Mississippi 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 · IllinoisForm IL-1040 with Schedule NR
File the Illinois nonresident return FIRST — you need the Illinois tax figure before you can complete Mississippi.
- 2Resident return · MississippiForm 80-160
File a Mississippi resident return reporting all income, then claim the credit for tax paid to Illinois. The credit is capped at what Mississippi would have charged on that same income, so if Illinois taxes it at a higher rate the difference is not refunded.
The two states, side by side
| Mississippi | Illinois | |
|---|---|---|
| Taxes wages | Yes — flat | Yes — flat |
| Reciprocity partners | None | 4 (Form IL-W-5-NR) |
| Convenience rule | No | No |
| Nonresident return | Form 80-205 | Form IL-1040 with Schedule NR |
| Credit for other-state tax | Form 80-160 | Schedule CR |
| Nonresident safe harbour | None published | 30 days |
| Local income tax | No | No |
| Revenue department | Mississippi 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 Mississippi 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: Mississippi → IllinoisHome state only
- 1099 contractor: Mississippi → IllinoisHome state, plus the client state if you work there
- Moved mid-year: Mississippi → IllinoisTwo part-year returns
Other Mississippi pairs
Questions people actually ask
I live in Mississippi and work in Illinois. Which state takes the tax out of my paycheck?
You file twice: Illinois first, then Mississippi. There is no reciprocity agreement between these two states, so Illinois taxes the income where it was earned and Mississippi taxes it again as resident income — with the resident credit removing the double charge rather than an exemption form preventing it.
Which state should my employer be withholding for?
Illinois. The wages are sourced to Illinois, so Illinois withholding is correct and there is no Mississippi 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. Mississippi gives residents a credit for tax paid to Illinois on the same income, claimed on Form 80-160. The credit is capped at the Mississippi tax on that income, so if Illinois taxes it more heavily the excess is not refunded by either state.
How current is this?
The Mississippi and Illinois rules on this page were last checked against Mississippi 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.
- Mississippi Department of Revenue — individual income taxaccessed 2026-08-07
- Illinois Department of Revenue — individual income taxaccessed 2026-08-07