Which state income tax do we have to pay if we live and work in two states?

Question

Moving to MI and will keep our home in IL. Husband will be working half the time in MI out of the corporate office and half the time from his office in our home in IL. Which state income tax do we have to pay?

Answer 1

You will have to determine when your residency changed.

Both MI and IL will probably want to claim him as a resident, in which cases, he owes taxes to both, but gets a credit for the taxes paid to the other state.

If you can demonstrate that he is a part-year/non-resident of IL, the tax form works a little differently.

Answer 2

BOTH

Answer 3

You will have to file a state income tax return for both Illinois and Michigan, and allocate the income between the two states.  First you have to determine which state is your resident state.  Then you will have to file a non-resident return for the other state.  Splitting the income and tax between two states can be a bit tricky.  Read the instructions for non-resident returns very carefully.