State income tax question (1 Viewer)

[hothouse_corn]

I should proly just DM @Jim14510, but maybe some of you also know tax things.

I'm starting a new job with an American-Italian multinational company headquartered in London, but I'm not a direct hire. I'll be employed as a contractor through an Illinois based company that provides 1600 contractors to the afore-mentioned multinational.

I live in South Dakota, and will mainly work there.

My question: Will I pay state income taxes to Illinois? How does this thing work?

Thanks in advance Jimmy Numbers.

 

[HuskerDocCo]

ewwww gawd damn bohunk lemme slap the shit outta ya belllcchhFUUUCCKKK

 

[Jim14510]

I should proly just DM @Jim14510, but maybe some of you also know tax things.

I'm starting a new job with an American-Italian multinational company headquartered in London, but I'm not a direct hire. I'll be employed as a contractor through an Illinois based company that provides 1600 contractors to the afore-mentioned multinational.

I live in South Dakota, and will mainly work there.

My question: Will I pay state income taxes to Illinois? How does this thing work?

Thanks in advance Jimmy Numbers.

Only thing that matters is where you're working. You keep enjoying your no state tax.

 

[HuskerGarrett]

I should proly just DM @Jim14510, but maybe some of you also know tax things.

I'm starting a new job with an American-Italian multinational company headquartered in London, but I'm not a direct hire. I'll be employed as a contractor through an Illinois based company that provides 1600 contractors to the afore-mentioned multinational.

I live in South Dakota, and will mainly work there.

My question: Will I pay state income taxes to Illinois? How does this thing work?

Thanks in advance Jimmy Numbers.

Congratulations on the new gig! Getting out of education?

Who was the crazy dude on RSS that started the thread about working for the “snaggleteefs” Sarasota?

 

[Jim14510]

Congratulations on the new gig! Getting out of education?

Who was the crazy dude on RSS that started the thread about working for the “snaggleteefs” Sarasota?

Yeah that was Sarasota. Was one of his better trolls imo.

 

[HuskerGarrett]

Yeah that was Sarasota. Was one of his better trolls imo.

Yeah I remember him bragging that he had hired a few Scrollers and was paying them like $200k or whatever it was. Guy was a nut job

 

[God is a Husker]

OP you’re not moving there right?


State income tax is wherever your residence is for 183 days or more of 1 year. (A favorite tactic by celebs or businessmen or former disgraced Presidents to spend over 1/2 the year in Florida to avoid NY State income tax)

 

[That SOB Van Owen]

OP you’re not moving there right?


State income tax is wherever your residence is for 183 days or more of 1 year. (A favorite tactic by celebs or businessmen or former disgraced Presidents to spend over 1/2 the year in Florida to avoid NY State income tax)

It’s actually based on where the income is earned. In OP’s case, since he’s still working in South Dakota, that’s where his income will be subject to tax (ie. No state tax). If he was having to travel to Illinois for work say, 50% of the time, basically 50% of his income would be subject to tax in Illinois. I believe some states have de minimis thresholds, but I’m a corporate guy so Jim numbers probably knows more about that.


You’re talking about establishing residence for state income tax purposes (ie. The state that will tax all of your income and then let you claim a credit for taxes paid to other states). Other states will still tax income that is earned in their state, though.

 

[HuskerDocCo]

It’s actually based on where the income is earned. In OP’s case, since he’s still working in South Dakota, that’s where his income will be subject to tax (ie. No state tax). If he was having to travel to Illinois for work say, 50% of the time, basically 50% of his income would be subject to tax in Illinois. I believe some states have de minimis thresholds, but I’m a corporate guy so Jim numbers probably knows more about that.


You’re talking about establishing residence for state income tax purposes (ie. The state that will tax all of your income and then let you claim a credit for taxes paid to other states). Other states will still tax income that is earned in their state, though.

 

[God is a Husker]

It’s actually based on where the income is earned. In OP’s case, since he’s still working in South Dakota, that’s where his income will be subject to tax (ie. No state tax). If he was having to travel to Illinois for work say, 50% of the time, basically 50% of his income would be subject to tax in Illinois. I believe some states have de minimis thresholds, but I’m a corporate guy so Jim numbers probably knows more about that.


You’re talking about establishing residence for state income tax purposes (ie. The state that will tax all of your income and then let you claim a credit for taxes paid to other states). Other states will still tax income that is earned in their state, though.

I must have misread/assumed the OP was working from home in South Dakota and was keeping his residency there.
Didn't know he would be going to and earning any income in Illinois.


I just looked it up, Illinois has a 30 day exemption for nonresidents earning income within the state.
After that all compensation earned within the state of Illinois is subject to state income tax on a per "working day" accounting.

Working day = any day that work done within the state of Illinois is greater than work done outside the state.

Travel time is not included UNLESS if traveling to Illinois for work was the only service for employer the nonresident was doing that day. (only the day of arrival is counted as a work day) *This will likely be the biggest factor in your days worked in Illinois aggregating quicker than anticipated because you live so far from Illinois that anytime you have to go to the Office/Illinois for anything will at minimum count as 1 work day.*


This law ( SB1515 ) appears to have been designed to target all the people that live in Indiana/Wisconsin but work in Chicagoland. Maybe also for the Quad Cities with people living in Cockeye but working in Illinois. Your employer will already have an accounting system/log for in state "work days", BUT be sure to keep your own record of days worked in Illinois @hothouse_corn

If ever you feel its a toss up if the day should be counted = just count it. Always assume the State or the IRS will take the position that something is taxable or not exempt. The Illinois state income tax rate is only 4.95%, so my advice is that the risk/pain of getting audited is worse than whatever money you would have "saved" by not counting that 1 day. Don't let the tail wag the dog.




PS: sorry for the delay, while I was typing the "what counts as a working day" my 2 year old son threw up milk and cherrioes and what appears dried cranberries all over the carpet. Kitchen floor was like 1 foot away dude, get some accuracy one time for me. (look at this glamourous lifestyle I live, posting about state tax codes on a football message board and cleaning puke out of carpet on a Saturday morning)

 

[That SOB Van Owen]

I must have misread/assumed the OP was working from home in South Dakota and was keeping his residency there.
Didn't know he would be going to and earning any income in Illinois.


I just looked it up, Illinois has a 30 day exemption for nonresidents earning income within the state.
After that all compensation earned within the state of Illinois is subject to state income tax on a per "working day" accounting.

Working day = any day that work done within the state of Illinois is greater than work done outside the state.

Travel time is not included UNLESS if traveling to Illinois for work was the only service for employer the nonresident was doing that day. (only the day of arrival is counted as a work day) *This will likely be the biggest factor in your days worked in Illinois aggregating quicker than anticipated because you live so far from Illinois that anytime you have to go to the Office/Illinois for anything will at minimum count as 1 work day.*


This law ( SB1515 ) appears to have been designed to target all the people that live in Indiana/Wisconsin but work in Chicagoland. Maybe also for the Quad Cities with people living in Cockeyes but working in Illinois. Your employer will already have an accounting system/log for in state "work days", BUT be sure to keep your own record of days worked in Illinois @hothouse_corn

If ever you feel its a toss up if the day should be counted = just count it. Always assume the State or the IRS will take the position that something is taxable or not exempt. The Illinois state income tax rate is only 4.95%, so my advice is that the risk/pain of getting audited is worse than whatever money you would have "saved" by not counting that 1 day. Don't let the tail wag the dog.




PS: sorry for the delay, while I was typing the "what counts as a working day" my 2 year old son threw up milk and cherrioes and what appears dried cranberries all over the carpet. Kitchen floor was like 1 foot away dude, get some accuracy one time for me. (look at this glamourous lifestyle I live, posting about state tax codes on a football message board and cleaning puke out of carpet on a Saturday morning)

He is working from home. My point is that regardless of what state your tax residence is in, other states will still tax income earned in that state if you’re above the de minimis threshold.

 

[That SOB Van Owen]

@God is a Husker to draw an example from your “celebrity moves to FL” example, let’s say you are a tax resident in NY, and earn $50 each in NY and FL. Say NY has a 10% rate, FL is 0%. NY will tax the entire $100 because you are a resident there, so $10. Typically you’d be allowed a credit for taxes paid to other states. However since the other state where you’re a taxpayer is FL and there is a 0% rate, you get $0 credit.
Total state tax bill = $10.


Now instead of being a resident of NY, you’re a resident of FL. FL taxes nothing because there’s no state income tax there. NY will tax the $50 earned in NY at a 10% rate, or $5. Total state income tax of $5.

the FL resident situation is much more advantageous, but you’ll still owe tax on the income earned in NY. That’s all I was sayin.

#TaxNerd

 

[God is a Husker]

@God is a Husker to draw an example from your “celebrity moves to FL” example, let’s say you are a tax resident in NY, and earn $50 each in NY and FL. Say NY has a 10% rate, FL is 0%. NY will tax the entire $100 because you are a resident there, so $10. Typically you’d be allowed a credit for taxes paid to other states. However since the other state where you’re a taxpayer is FL and there is a 0% rate, you get $0 credit.
Total state tax bill = $10.


Now instead of being a resident of NY, you’re a resident of FL. FL taxes nothing because there’s no state income tax there. NY will tax the $50 earned in NY at a 10% rate, or $5. Total state income tax of $5.

the FL resident situation is much more advantageous, but you’ll still owe tax on the income earned in NY. That’s all I was sayin.

#TaxNerd

bruh I'm a tax nerd too


I was just under the impression OP was asking if he straight up owed Illinois state income tax despite not being a resident. No offense to @hothouse_corn but most of the time when people ask me questions about taxes or the law I just assume they don't know much about either and are simply asking a general common question.

Example of a very common question that the general public has no idea on:
"I just sold my house and now I have to pay taxes on it?"
How much did you sell it for?
"$50,000 more than we bought it for."
How long was that your residence? Was it your only residence?
"11 years. yes only residence."
You Gucci baby keep yo money. 🥳 They don't need to know about 121 and a cap for over basis, shoot they probably don't even know what basis is. haha

 

[That SOB Van Owen]

bruh I'm a tax nerd too


I was just under the impression OP was asking if he straight up owed Illinois state income tax despite not being a resident. No offense to @hothouse_corn but most of the time when people ask me questions about taxes or the law I just assume they don't know much about either and are simply asking a general common question.

Example of a very common question that the general public has no idea on:
"I just sold my house and now I have to pay taxes on it?"
How much did you sell it for?
"$50,000 more than we bought it for."
How long was that your residence? Was it your only residence?
"11 years. yes only residence."
You Gucci baby keep yo money. 🥳 They don't need to know about 121 and a cap for over basis, shoot they probably don't even know what basis is. haha

You’re absolutely right. I read your post as saying that residence is the only thing that determines state taxability, which isn’t true. Then again I probably read it differently because I am a #TaxNerd. Regardless, in OP’s situation he should be in the clear.

I thought you were an attorney for some reason. Maybe you are - tax attorney?

 

[ThomOsborneMD]

Just don’t file taxes next year and it won’t be a concern.

 

[HuskerDocCo]

de minimis threshold

is that the fancy way of saying “poor threshold”?

 

[That SOB Van Owen]

is that the fancy way of saying “poor threshold”?

Haha, in the context I used it in it could mean either a low income threshold (Ie. poor) or a low days spent in the state threshold. In the case of OP’s example, it means that he can work for up to 30 days in Illinois without paying tax there as @God is a Husker pointed out.

 

[hothouse_corn]

Thanks to all of you that have replied. @HuskerDocCo might still hate me, but we have a truce in effect.

Congratulations on the new gig! Getting out of education?

Who was the crazy dude on RSS that started the thread about working for the “snaggleteefs” Sarasota?

Yep, I'm getting out of the business of indoctrinating young people at universities into the communist and socialist policies related to precision agriculture and machine control systems. My tongue is firmly in my cheek.

bruh I'm a tax nerd too


I was just under the impression OP was asking if he straight up owed Illinois state income tax despite not being a resident. No offense to @hothouse_corn but most of the time when people ask me questions about taxes or the law I just assume they don't know much about either and are simply asking a general common question.

Example of a very common question that the general public has no idea on:
"I just sold my house and now I have to pay taxes on it?"
How much did you sell it for?
"$50,000 more than we bought it for."
How long was that your residence? Was it your only residence?
"11 years. yes only residence."
You Gucci baby keep yo money. 🥳 They don't need to know about 121 and a cap for over basis, shoot they probably don't even know what basis is. haha

I think I fall into the "dumb" portion of the general public when it comes to accumulating wealth, paying taxes, and all that jazz. I've been employed by US states for the past 17 or so years. What\ is a basis? Who do I ask?

I removed a few fuck's from this post to seem something.

 

[HuskerPAC]

Yeah that was Sarasota. Was one of his better trolls imo.

Was he pure troll?

 

[Jim14510]

Was he pure troll?

I assume so but not sure.