--- title: "Illinois Tax Reciprocity: Form IL-W-5-NR Explained | MCC" description: "Illinois income tax reciprocity with IA, KY, MI and WI: who files Form IL-W-5-NR, the conditions and where commuters file, from official pages." url: "https://mcc-solutionsnj.com/bookkeeping/state-tax-reciprocity-illinois" --- Reciprocity · Illinois # Illinois income tax reciprocity Who can skip Illinois withholding, the certificate the employer needs, and what Illinois Department of Revenue says about commuters and remote days. [![Intuit ProAdvisor Gold tier badge](/img/credentials/intuit-proadvisor-gold.png)](https://proadvisor.intuit.com/app/accountant/search?searchId=matthew-coleman77)Gold tier in Intuit's ProAdvisor program. [See my Intuit listing](https://proadvisor.intuit.com/app/accountant/search?searchId=matthew-coleman77) Keeping your own books? Tallyfinch does invoices, bank import and reports on your computer. [See Tallyfinch](/bookkeeping/mcc-books-downloadable-bookkeeping-software) **Short answer.** Illinois has reciprocal agreements with Iowa, Kentucky, Michigan and Wisconsin. A resident of one of them who works here gives the employer Form IL-W-5-NR and pays income tax on covered wages at home. ## Illinois at a glance Income tax on wages Yes Agreements named Iowa, Kentucky, Michigan and Wisconsin What's covered Compensation paid to residents of the four states. Employee form Form IL-W-5-NR, Employee's Statement of Nonresidence in Illinois Nonresidents Withheld from unless an agreement or exemption applies Resident credit Stated Convenience rule Not stated on the pages we read Agency Illinois Department of Revenue ## Illinois's agreement partners | Partner | Other side | Their form | Conditions | Check | | --- | --- | --- | --- | --- | | Iowa | Names this state too | 44-016 | None beyond the general ones | [Live there, work here](/bookkeeping/live-in-one-state-work-in-another-checker?home=ia&work=il) | | [Kentucky](/bookkeeping/state-tax-reciprocity-kentucky) | Names this state too | 42A809 | None beyond the general ones | [Live there, work here](/bookkeeping/live-in-one-state-work-in-another-checker?home=ky&work=il) | | [Michigan](/bookkeeping/state-tax-reciprocity-michigan) | Names this state too | MI-W4 | None beyond the general ones | [Live there, work here](/bookkeeping/live-in-one-state-work-in-another-checker?home=mi&work=il) | | [Wisconsin](/bookkeeping/state-tax-reciprocity-wisconsin) | Names this state too | W-220 | None beyond the general ones | [Live there, work here](/bookkeeping/live-in-one-state-work-in-another-checker?home=wi&work=il) | ## The form: IL-W-5-NR Employee's Statement of Nonresidence in Illinois. A resident of Iowa, Kentucky, Michigan or Wisconsin completes it to be exempt from Illinois withholding. Without it, the employer must withhold Illinois tax. Hiring in another state? [Employer registration in Illinois, done for you](/bookkeeping/out-of-state-employer-registration), or [a free bookkeeping health check](/bookkeeping/health-check). "To be exempt from Illinois Income Tax withholding requirements you must complete Form IL-W-5-NR." ## In the official words "compensation paid to residents of Iowa, Kentucky, Michigan, and Wisconsin" "If your employee does not complete this form, you must withhold Illinois Income Tax." ## Credit for tax paid to other states An Illinois resident can claim a credit for tax paid to another state on Schedule CR, Credit for Tax Paid to Other States. Wages from Iowa, Kentucky, Michigan or Wisconsin employers fall under the reciprocal agreements: those states don't tax them, and Illinois does. ## Days and thresholds Illinois Publication 130 ties nonresident compensation to performing significant service in Illinois for more than 30 working days (Form IL-W-6 is for nonresidents working in Illinois more than 30 working days in the year). **Not confirmed on the pages we read:** a convenience of the employer rule. ## Official sources - [Illinois Department of Revenue: Publication 130, Withholding Illinois Income Tax for My Employees](https://tax.illinois.gov/research/publications/pubs/who-is-required-to-withhold-illinois-income-tax/withholding-illinois-income-tax-for-my-employees.html) (checked November 2026) - [Illinois Department of Revenue: I am an Illinois resident and earn wages in another state](https://tax.illinois.gov/questionsandanswers/answer.806.html) (checked November 2026) General information, not tax advice. Checked November 2026 against the official pages listed above. Agreements, forms and thresholds change, and your own facts (where you lived, where you worked each day, other income) decide the answer; check with a tax professional for your situation. MCC Solutions is not a CPA firm and is not affiliated with any tax agency. ## Questions about Illinois **Which states have a reciprocal agreement with Illinois?** Iowa, Kentucky, Michigan and Wisconsin. Illinois's page puts it this way: "compensation paid to residents of Iowa, Kentucky, Michigan, and Wisconsin." **Which form does a nonresident give a Illinois employer?** Form IL-W-5-NR, Employee's Statement of Nonresidence in Illinois. A resident of Iowa, Kentucky, Michigan or Wisconsin completes it to be exempt from Illinois withholding. Without it, the employer must withhold Illinois tax. **Does Illinois withhold from nonresidents from other states?** Yes, unless an agreement or exemption applies. The official wording: "If your employee does not complete this form, you must withhold Illinois Income Tax." **Do Illinois residents get credit for tax paid to another state?** An Illinois resident can claim a credit for tax paid to another state on Schedule CR, Credit for Tax Paid to Other States. Wages from Iowa, Kentucky, Michigan or Wisconsin employers fall under the reciprocal agreements: those states don't tax them, and Illinois does. **Is there a days-in-state rule for Illinois withholding?** Illinois Publication 130 ties nonresident compensation to performing significant service in Illinois for more than 30 working days (Form IL-W-6 is for nonresidents working in Illinois more than 30 working days in the year). All states: [reciprocity agreements by state](/bookkeeping/state-tax-reciprocity-agreements) · [Live in one state, work in another](/bookkeeping/live-in-one-state-work-in-another-checker) · [District of Columbia](/bookkeeping/state-tax-reciprocity-district-of-columbia) · [Indiana](/bookkeeping/state-tax-reciprocity-indiana) Working across a state line? ## Multi-State Worker Tax Organizer Log every workday by state, total the days, and flag whether your home and work states have an agreement, with a Illinois checklist of the forms to give your employer. [Get the organizer ($15)](/toolkits/multi-state-worker-tax-organizer) [Free sample](/toolkits/multi-state-worker-tax-organizer#free-starter)14-day full refund Tallyfinch ### Books you keep on your own computer Tallyfinch does invoices, bills, bank import, reconciliation and the main reports, in a file you own. $99 once, then $5 a month for updates; the app keeps working if you stop the plan. It does not do payroll or sales tax filing. The free download records up to 60 entries. [See Tallyfinch](/bookkeeping/mcc-books-downloadable-bookkeeping-software) [Download it free](/tools/pro/trial/mccBooks) [Compare the three apps](/software) ## Payroll in more than one state? [See bookkeeping services](/bookkeeping/)[Call (908) 444-6373](tel:+19084446373)