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There are similar questions for Illinois and California, but since situation might be different for each state so I am asking this specifically for Indiana and Illinois.

I lived in Indiana for the tax year 2020. I am on F-1 OPT. I started working for a US-wide company from October 26th ’2020. My team sits in Naperville, IL.

For the tax return should I be saying that I had an income from Illinois too? Or I will say that all my Income is from Indiana state only?

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  • The key question is where did you work. You said your "team sits" in Illinois and the company is "based" in Illinois, but those do not tell us where you work. – user102008 Feb 22 at 21:33
  • @user102008 I was living and working from Indiana. – PHcoDer Feb 23 at 13:38
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I am not a lawyer nor a tax preparer, so this is 100% amateur.

It would appear that Illinois and Indiana do not have a state income reciprocity agreement in place. It is possible that your income has IL state income taxes withheld from it, but since you are a resident of IN, that is the state that has claim of your state-level income tax. Your W-2 should be very clear about what state they paid your state income taxes to, and if that happens to be IL, you will probably end up filing 1 federal form and 2 state forms: a form to IL to get all the taxes withheld refunded to you and a from to IN to pay all the taxes you owed.

Furthermore, you will probably need to look into making estimated state income taxes to IN going forward as they expect you to pay-as-you-go instead of getting one large check when filed. This will stink for you as both IL and IN will have your money and you will only get IL's back as one large check when you file their return. The gov't insists on you paying in as you go, but won't refund as they go. You may be able to talk to your HR dept and have no state tax withheld on your paychecks, though.

But first step in all this is looking on your W-2, Box 15. That will tell you what state got the amount in Box 17 (state income tax).

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    My W2 shows that only taxes for Indiana have been withheld. So, then I don't need to file Illinois taxes? – PHcoDer Feb 22 at 22:52
  • "since you are a resident of IN, that is the state that has claim of your state-level income tax." Income is taxable in both the state of residence and the state where the work was performed (and if they are different states then a credit can be claimed in one of them). Based on the question so far, we don't know what the state where the work was performed was. – user102008 Feb 22 at 23:08
  • @user102008 I was living in Indiana and hence working from there. My company is located at many locations in the USA. Other members of my team and manager work from Illinois. My company also has a office in Illinois. Does this answer your question? – PHcoDer Feb 23 at 13:35
  • 'My W2 shows that only taxes for Indiana' and you are a resident of IN, then you are good. You will just have to do the state form for IN. There is nothing to file with IL. Also the estimates taxes discussion above is moot, since your employer appears to be withholding and sending tax dollars to the state of IN for you. – R. Hamilton Feb 23 at 14:25
  • @PHcoDer: "I was living in Indiana and hence working from there." So you were working physically at home? Or working physically at an office in Indiana? I am not sure what exactly you mean by "working from". You living in Indiana does not mean you work in Indiana; it is quite common for people to commute to work in an office in another state. – user102008 Feb 23 at 18:26
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Look at your W-2. Your company should have already withheld state taxes for the correct state(s). Likely that is Indiana, where you both live and work.

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    They only withhold based on what the employee reported. I knew somebody who didn't update their W-4 for two years after they moved. Made April very fun... – mhoran_psprep Feb 22 at 20:34
  • "Indiana, where you both live and work." Based on the question so far, we don't know where the OP worked. – user102008 Feb 22 at 23:09
  • Based on Chicagoland geography, I made an educated assumption. You try commuting from Indiana to Naperville. :) – Orange Coast- reinstate Monica Feb 23 at 19:44
  • @OrangeCoast-reinstateMonica, I lived and worked from Indiana. Its WFH. – PHcoDer Feb 23 at 23:20
  • @user102008 What does OP mean? – PHcoDer Feb 23 at 23:21

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