Illinois / Iowa tax reciprocity
Each pair below is taxed by the RESIDENCE state, not the work state — the work state agrees not to withhold. Figures are illustrative, on a $75,000 salary.
Who taxes you, and what to file
The certificate goes to your employer in the state you work in. Figures are state income tax on $75,000, single, no dependents.
| Work in | Live in | Certificate to file | Tax under reciprocity | If the work state taxed you |
|---|---|---|---|---|
| Illinois | Iowa | IL-W-5-NR | $2,198 | $3,568 |
| Iowa | Illinois | Form 44-016 | $3,568 | $2,198 |
The last column is hypothetical — what the work state would take with no agreement in place. It is not a second bill.
Does this cancel the local city or county tax?
Reciprocity is a state income tax concept. A local wage tax is a separate levy and can survive it.
- Working in Illinois
- Publication 130 does not address local wage taxes either way; Illinois has no state-wide local income tax for it to address.
Sources
- Illinois: Illinois Dept. of Revenue — Publication 130 (February 2026) — https://tax.illinois.gov/content/dam/soi/en/web/tax/research/publications/pubs/documents/pub-130.pdf
- Iowa: Iowa Dept. of Revenue, Form 44-016 — Employee's Statement of Nonresidence in Iowa — https://revenue.iowa.gov/media/2318/download?inline=
Run your own Illinois / Iowa numbers
Opens on work in Illinois, live in Iowa. Change the salary, either state, or filing status below.
Illinois / Iowa: common questions
Does Illinois tax Iowa residents who work in Illinois?
No -- Illinois and Iowa have a reciprocal personal income tax agreement covering W-2 wages and salary. An Iowa resident working in Illinois is taxed by Iowa, not Illinois, on that income. File Form IL-W-5-NR with your Illinois employer to stop Illinois withholding.
What form does an Illinois resident file to stop Iowa withholding?
Iowa Form 44-016, "Employee's Statement of Nonresidence in Iowa," filed with your Iowa employer.
Does this cover self-employment income?
No -- both states' own guidance is explicit that the agreement covers wages and salary only. Self-employment income, gambling winnings, and other income types are taxed under each state's normal nonresident rules.
Other pairs involving these states
See all 32 state reciprocity pairs →