Illinois / Michigan 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 | Michigan | IL-W-5-NR | $2,937 | $3,568 |
| Michigan | Illinois | No state form (employer-developed form or letter; MI-W4 line 8b) | $3,568 | $2,937 |
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.
- Working in Michigan
- RAB 2017-13: "Reciprocal agreements do not apply to independent contractors, local taxes, or income other than compensation." Michigan city income taxes therefore survive reciprocity.
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
- Michigan: Michigan Dept. of Treasury — Revenue Administrative Bulletin 2017-13 — https://www.michigan.gov/taxes/rep-legal/rab/2017-revenue-administrative-bulletins/revenue-administrative-bulletin-2017-13
Run your own Illinois / Michigan numbers
Opens on work in Illinois, live in Michigan. Change the salary, either state, or filing status below.
Illinois / Michigan: common questions
Does Illinois tax Michigan residents who work there?
No. Illinois does not withhold its state income tax from a Michigan resident's wages under the reciprocity relationship in effect for 2026 — that income is taxed by Michigan instead. File IL-W-5-NR with your Illinois employer to stop the withholding. Source: Illinois Dept. of Revenue — Publication 130 (February 2026).
Does Michigan tax Illinois residents who work there?
No. Michigan does not withhold its state income tax from an Illinois resident's wages under the reciprocity relationship in effect for 2026 — that income is taxed by Illinois instead. File No state form (employer-developed form or letter; MI-W4 line 8b) with your Michigan employer to stop the withholding. Source: Michigan Dept. of Treasury — Revenue Administrative Bulletin 2017-13.
Does reciprocity also cancel the local city or county tax?
Not necessarily — reciprocity is a state income tax concept, and a local wage tax is a separate levy that can survive it. Michigan: RAB 2017-13: "Reciprocal agreements do not apply to independent contractors, local taxes, or income other than compensation." Michigan city income taxes therefore survive reciprocity. Illinois: Publication 130 does not address local wage taxes either way; Illinois has no state-wide local income tax for it to address.
Does reciprocity cover self-employment or 1099 income?
No. Reciprocity covers employee compensation only, and the scope is set by each state's own materials rather than by a common rule — covers salaries, wages, tips and other employee compensation only. Self-employment income, rental income, gambling winnings and pass-through income are outside it, and may still require a nonresident return in the work state.
Other pairs involving these states
See all 32 state reciprocity pairs →