Live in Illinois, work in Kentucky
State income tax on wages · single filer · tax year 2026
Kentucky takes
$0
on wages earned there
Illinois takes
$2,825
after the credit it gives
Both together
$2,825
state tax for the year
Cost of the line
$0
a year, above working at home
What crossing the line costs
agreementKentucky does not tax you at all — the two states have an agreement, and you file a certificate with your employer. Solid is what you actually pay; the faded part of the Illinois bar is the credit it hands back. State income tax only — federal and payroll tax apply on top, and a city wage tax may too.
Which state taxes you, and what it costs
- Of all the ways two states can handle a commuter, this is the kindest. Illinois and Kentucky have agreed that only your home state taxes your wages. Your bill is $2,825, the same as someone working down the road from their house. Hand your employer the non-residence certificate, named in the panel beside this page, so Kentucky knows not to withhold.
- Illinois is one of 5 states sending this many workers into Kentucky, and it sits at number 4 of them, with 7,653 jobs. States used to handling out-of-state workers usually make the filing side of it straightforward.
- Illinois and Kentucky hold a reciprocity agreement covering wages, so Kentucky does not tax this commuter at all and no resident credit is needed. The commuter files the work state's non-residence certificate with the employer — it is named in the panel beside this page — which stops Kentucky withholding at source, and owes Illinois alone — $2,825 at the reference salary, identical to an earner who never crosses the line. ⚠️ The agreement covers WAGES. Other income sourced to Kentucky is outside it, and an employee who does not file the certificate has Kentucky tax withheld and must reclaim it on a non-resident return.
- Kentucky draws commuters of this scale from 5 states, and Illinois ranks number 4 among them with 7,653 jobs. A work state pulling from that many directions tends to have a well-established non-resident filing routine, which is a practical convenience rather than a tax saving.
Where the money goes
A $75,000 salary
- Federal income tax$7,670
- Social Security and Medicare$5,738
- State income tax$3,568
- Yours$58,025
| Federal income tax10.23% | $7,670 |
|---|---|
| Social Security and Medicare7.65% | $5,738 |
| State income tax4.76% | $3,568 |
| Yours77.37% | $58,025 |
Which rung you are on
A $75,000 salary
| This rung starts at | $66,500 |
|---|---|
| Next rung starts at | $121,800 |
| Room before it | $46,800 |
Federal only, measured on gross pay — so the first rung is what the standard deduction covers.
The arithmetic, step by step
| Kentucky takes, on wages earned there | $0 |
|---|---|
| Illinois charges its residents | $2,825 |
| Less the credit Illinois gives | $0 |
| Total state tax | $2,825 |
| If you also worked in Illinois | $2,825 |
| Difference | $0 |
On a reference salary of $60,000 a year, single filer. Both states run progressive schedules, so the figures do not simply scale — use the tool above for your own salary.
What this page does not cover
- City wage taxes are not in these numbers. A few places charge them, and where they do the money is real. If your job in Kentucky is inside a city that taxes workers, add that on top. Where it is not, the state figures above are the whole of it for Illinois residents.
- Two assumptions sit under this page. First, that Kentucky is where all your pay comes from. Second, that you go there rather than working from your kitchen in Illinois. Mixed income changes how the credit is worked out, and remote days have their own rules in some states.
- Every dollar figure here uses a salary of sixty thousand a year. It is a stated benchmark, not a guess at what people on this route earn. Scale them to your own pay. Which state ends up dearer, Illinois or Kentucky, generally holds at other salaries — though the gap between them can widen or narrow as you cross tax brackets.
- These figures cover the STATE layer only. City and municipal wage taxes sit on top of them and are not included: a commuter into Philadelphia pays its wage tax on top of anything here, and Ohio's municipalities run their own credit system, which this site models in its own families. New York City, by contrast, taxes only its residents, so a commuter into it adds nothing at the city level. Whether Kentucky or Illinois carries a local layer is a separate question from the state arithmetic above.
- The arithmetic assumes all wages are earned in Kentucky and that there is no other income. That matters for the credit: where income comes from several states, Illinois limits the credit to the share of its own tax attributable to the Kentucky portion, computed as a ratio rather than the straightforward cap used above. It also assumes days are worked in Kentucky rather than remotely — several states tax a non-resident's remote days as though they were worked at the employer's location, which reverses the usual expectation and is handled on this site's reciprocity pages.
- Dollar amounts are computed at a stated reference salary of sixty thousand rather than a corridor wage average, which no published source provides per state pair. Because both states' liabilities and the credit between them are functions of the same income, the direction of the Illinois to Kentucky comparison holds at other salaries even though the amounts do not — with one qualification worth stating, that a progressive schedule can change the SIZE of the gap at higher incomes, and in Kentucky's case a bracket crossed on one side and not the other is exactly where that happens.
Questions people ask
Do I pay state tax twice, to Illinois and Kentucky?
You file in both states, but you do not pay the full amount to both. Illinois credits the tax Kentucky collected, capped at its own charge on that income. The practical result is one bill at the higher of the two levels: $2,825 for the year.
Does working in Kentucky cost me anything extra?
It costs you nothing in tax. $2,825 is what you owe whether you work in Kentucky or at home in Illinois. The only real cost of the crossing is the extra return.
What do I give my employer so Kentucky stops taking tax?
A single form, filed with your employer rather than with either state. It tells them you live in Illinois and that Kentucky has agreed not to tax you, so they stop withholding Kentucky tax from your pay. Without it the money comes out all year and you have to claim it back on a return you would not otherwise file.
Do I have to file tax returns in both Illinois and Kentucky?
Two returns is the normal outcome here, even when only one state ends up taking anything. Kentucky generally wants to see a non-resident return from people who work there, and Illinois wants your whole picture. It is paperwork rather than extra tax.
What if I work from home in Illinois some days instead of going to Kentucky?
Working from home usually moves that day's pay out of Kentucky and into Illinois alone. A handful of states disagree and tax remote days as if you had commuted. This page assumes you actually travel to Kentucky, so if a lot of your week is at home the split will differ from what you see here.
How is liability allocated between residence and work state on the same wages?
Both jurisdictions assert a claim on the same wages — Kentucky on a source basis, Illinois on residence. The residence state grants a credit for tax paid to the source state, limited to the residence state's own liability on that income. Net combined liability therefore equals the greater of the two liabilities rather than their sum, $2,825 at the reference salary, and the split between the two treasuries is the only thing the credit changes.
Why is the marginal state-tax cost of this crossing zero?
Marginal cost is zero because the binding liability is the residence state's. Illinois's own charge on this income equals or exceeds Kentucky's, so the resident credit absorbs the source-state tax entirely and combined liability equals residence-only liability, $2,825. ⚠️ Zero marginal tax is not zero obligation: a non-resident return may still be required in Kentucky.
What administrative step gives effect to the reciprocity exemption?
The exemption is self-executing only on filing: the employee furnishes the work state's non-residence certificate to the employer, which relieves the employer of the obligation to withhold Kentucky tax. Absent the certificate the employer withholds, and the employee recovers the amount by filing a Kentucky non-resident return — the liability position is identical, the cash-flow position is not.
What filing obligations arise in each state on this corridor?
Generally two. Illinois requires a resident return reporting all income; Kentucky requires a non-resident return reporting the income sourced to it, which is also the mechanism by which the resident credit is substantiated. ⚠️ A filing obligation is distinct from a liability: a reciprocity exemption or a zero net position removes tax without necessarily removing the return, and the non-resident return is frequently what establishes the credit claimed on the resident one.
How do remote working days affect sourcing between these two states?
Ordinarily wages are sourced to where the services are performed, so days worked remotely from Illinois fall outside Kentucky's jurisdiction and the source-state apportionment shrinks accordingly. ⛔ The exception is the "convenience of the employer" rule, which several states apply: a non-resident's remote days are sourced to the employer's location unless the remote work is required by the employer rather than chosen by the employee. The figures on this page model in-person attendance in Kentucky throughout.