Live in Indiana, work in Illinois
State income tax on wages · single filer · tax year 2026
Illinois takes
$2,825
on wages earned there
Indiana takes
$0
after the credit it gives
Both together
$2,825
state tax for the year
Cost of the line
$1,085
a year, above working at home
What crossing the line costs
costs youIllinois charges more than Indiana would, and Indiana only credits you up to its own bill — so the difference stays with you. Solid is what you actually pay; the faded part of the Indiana 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
- You are not taxed twice over. You are taxed at the higher of the two rates, which is its own kind of bad news. Indiana hands back what you paid Illinois, but only as far as its own bill goes. Anything Illinois charges above that, you keep paying. On this salary the year comes to $2,825. Work at home instead and it would be $1,741.
- Of all the states feeding workers into Illinois, Indiana sends the most: 97,256 jobs. That makes this the largest crossing of its kind into the state, out of 6 of them.
- Illinois taxes wages earned inside its borders by non-residents, and Indiana taxes its residents on the same wages wherever they are earned. The resident credit resolves the overlap but does not erase it: Indiana credits tax paid to Illinois only up to what it would itself have charged on that income, so the commuter settles at the higher of the two liabilities rather than the sum. At the reference salary that is $2,825 against $1,741 for the same earner working at home — $1,085 attributable to the state line itself. ⚠️ The corollary is the part most readers have backwards: moving to a cheaper home state while keeping the job in Illinois changes the split between the two treasuries and not the total.
- Measured against every other state sending commuters into Illinois, this is the largest single flow: 97,256 jobs held by Indiana residents, ahead of all 6 corridors of this size into that state. Census LODES counts jobs rather than people, so a worker holding two positions in Illinois appears twice.
Where the money goes
A $75,000 salary
- Federal income tax$7,670
- Social Security and Medicare$5,738
- State income tax$2,183
- Yours$59,410
| Federal income tax10.23% | $7,670 |
|---|---|
| Social Security and Medicare7.65% | $5,738 |
| State income tax2.91% | $2,183 |
| Yours79.21% | $59,410 |
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
| Illinois takes, on wages earned there | $2,825 |
|---|---|
| Indiana charges its residents | $1,741 |
| Less the credit Indiana gives | $1,741 |
| Total state tax | $2,825 |
| If you also worked in Indiana | $1,741 |
| Difference | $1,085 |
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 Illinois 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 Indiana residents.
- Two assumptions sit under this page. First, that Illinois is where all your pay comes from. Second, that you go there rather than working from your kitchen in Indiana. 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, Indiana or Illinois, 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 Illinois or Indiana carries a local layer is a separate question from the state arithmetic above.
- The arithmetic assumes all wages are earned in Illinois and that there is no other income. That matters for the credit: where income comes from several states, Indiana limits the credit to the share of its own tax attributable to the Illinois portion, computed as a ratio rather than the straightforward cap used above. It also assumes days are worked in Illinois 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 Indiana to Illinois 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 Illinois'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 Indiana and Illinois?
You file in both states, but you do not pay the full amount to both. Indiana credits the tax Illinois 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.
Would moving out of Indiana lower my state tax if I keep working in Illinois?
Not while you work in Illinois. That state's claim comes from where the work happens. Indiana is the one giving ground, through the credit, and a cheaper home state gives less ground rather than costing you less. The number that matters is set by Illinois.
Do I have to file tax returns in both Indiana and Illinois?
Usually yes, and it catches people out. Indiana wants a return because you live there. Illinois usually wants one too, because you earned money inside it — even in the cases where you end up owing it nothing. Filing in a state and paying it are separate things, and the return is often what proves you do not owe.
What if I work from home in Indiana some days instead of going to Illinois?
It depends on the state, and the answer is not the one most people expect. You might assume a day worked at your kitchen table in Indiana is taxed by Indiana. Usually that is right, and your Illinois share shrinks to the days you were actually there. But a few states tax days you work at home as though you had been in the office, unless your employer required you to be elsewhere. It is worth checking which kind Illinois is before assuming.
How is liability allocated between residence and work state on the same wages?
Both jurisdictions assert a claim on the same wages — Illinois on a source basis, Indiana 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.
Does changing residence reduce combined liability while the work state is unchanged?
No, while the source state is unchanged. Illinois's claim arises from where the services are performed and is unaffected by residence. Because the residence credit is capped at the residence state's own liability, combined liability equals the greater of the two — so substituting a lower-tax residence reduces the residence-state component toward zero while leaving the total at Illinois's level. The binding variable is the work location, not the home one.
What filing obligations arise in each state on this corridor?
Generally two. Indiana requires a resident return reporting all income; Illinois 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 Indiana fall outside Illinois'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 Illinois throughout.