Enlarge image | Illinois Department of Revenue Schedule NR IL-1040 Instructions 2022 General Information What is the purpose of Schedule NR? earned or received income from Illinois sources while you were Schedule NR, Nonresident and Part-Year Resident Computation not an Illinois resident, or of Illinois Tax, allows part-year or nonresidents of Illinois to determine are entitled to receive a refund of Illinois Income Tax. the income that is taxed by Illinois during the tax year and to figure Illinois Income Tax. As a part-year resident, the rules you use to determine Illinois income and tax depend on whether or not you were a resident of Schedule NR to Form IL-1040, Individual Income Tax Return. Illinois when you received the income. What if I was a nonresident of Illinois for the entire tax year? If you were a resident of Illinois when you received the income, you If you were a nonresident of Illinois during the entire tax year, will (within certain limitations) be taxed on 100 percent of the income you must complete and file Form IL-1040 and Schedule NR if you you received while you were a resident, regardless of the source. earned enough taxable income from Illinois sources to have a If you were a nonresident of Illinois when you received the income, tax liability (i.e., your Illinois base income from Schedule NR is you will be taxed only on the income you received from Illinois greater than your Illinois exemption allowance on Schedule NR), sources. or When completing Schedule NR, you must include in Column B are entitled to a refund of Illinois Income Tax that was withheld of each line the income you received during the time you were from your pay in error. a resident and the Illinois income you received during the time you were not a resident. See “Part-Year Resident Step-by-Step If you were not a resident of Iowa, Kentucky, Michigan, or Instructions” for details. Wisconsin, you must attach a statement from your employer, on company letterhead, indicating that your wages were not earned in Use the same method of reporting that you use for filing your federal Illinois and Illinois tax was withheld in error. return. Report your income when you receive it and your deductions when they are paid. However, if you use the accrual method, What if I was a resident of a reciprocal state for the tax “received” means “earned or received.” Income that you received year, I was a resident of another state living in Illinois only through partnerships, S corporations, trusts, or estates is considered to accompany my spouse who was stationed in Illinois received on the last day of the entity’s tax year. for military service, or I was a spouse who elected to use Temporary absences from Illinois during the tax year do not my service member spouse’s state of residence for tax qualify you for part-year resident status. purposes pursuant to the Veterans Benefits and Transition What if I received income from a business or a Act of 2018? farm during the tax year? If you were an Iowa, Kentucky, Michigan, or Wisconsin resident or If, while you were a nonresident of Illinois, you received a military spouse, and earned income in Illinois, you are exempt from paying Illinois Income Tax on income you earned from business income earned both inside and outside Illinois, or salaries, wages, tips, and other employee compensation. You are farm income earned both inside and outside Illinois, exempt because Illinois has a reciprocal agreement with these you must complete the Business or Farm Income Apportionment states or because military spouse wages are taxable to the state Formula (IAF) Worksheet on Page 10. The IAF Worksheet allows you of residence. You must file Form IL-W-5-NR, Employee’s Statement to figure the Illinois portion of your business or farm income. Be sure of Nonresidence in Illinois, with your employer to be entitled to to keep a copy of this worksheet with your income tax records. exemption from withholding. If you are a resident of a reciprocal state or a military spouse, you do not have to file Form IL-1040 and What is business income? Schedule NR unless you Business income is income you earned or received from any earned income in Illinois from sources other than wages activity that you took part in during the regular course of your trade paid to you as an employee, or or business. It does not include wages or other compensation you received as an employee. It includes all income (other than had Illinois Income Tax withheld from your pay in error. compensation) that may be apportioned by formula among the states What if I was a nonresident professional athlete? in which you are doing business without violating the Constitution of the United States. All income (other than compensation) you received All nonresident members of a professional athletic team are is business income unless it is clearly attributable to only one state subject to Illinois Income Tax on the Illinois portion of their total and is earned or received through activities totally unrelated to compensation for services performed as a member of such a team. any business you are conducting in more than one state. Business For more information, see Publication 130, Who is Required to income is net of all deductions attributable to that income. Withhold Illinois Income Tax, or refer to “What if I need additional assistance?” on page 2 of these instructions. What if I received income from partnerships, S corporations, trusts, or estates? What if I was an Illinois resident for part of the tax year? If you received income from an Illinois partnership or S corporation, If you were a resident of Illinois during part of the tax year, you that entity is required to send you an Illinois Schedule are considered a part-year resident and must complete and file K-1-P, Partner’s or Shareholder’s Share of Income, Deductions, Form IL-1040 and Schedule NR if you Credits, and Recapture. Also, the entity is required to send you the earned or received income from any source while you partner’s and shareholder’s instructions for completing Schedule NR. were an Illinois resident, IL-1040 Schedule NR Instructions (R-12/22) Printed by authority of the State of Illinois. Electronic only, one copy. Page 1 of 10 |
Enlarge image | General Information If you received income from an Illinois trust or estate, that entity is What if I need additional assistance or forms? required to send you an Illinois Schedule K-1-T, Beneficiary’s Share • Visit our website at tax.illinois.gov for assistance, forms or of Income and Deductions. Also the entity is required to send you the schedules. beneficiary’s instructions for completing Schedule NR. • Write us at: If you are a nonresident and your only income in Illinois is from ILLINOIS DEPARTMENT OF REVENUE one or more partnerships, S corporations, or trusts that made sufficient pass-through withholding on your behalf to cover your Illinois Income PO BOX 19001 Tax liability, you are not required to file a Form IL-1040. SPRINGFIELD ILLINOIS 62794-9001 • Call 1 800 732-8866 or 217 782-3336 (TDD, telecommunication device for the deaf, at 1 800 544-5304). • Visit a taxpayer assistance office - 8:00 a.m. to 5:00 p.m. (Springfield office) and 8:30 a.m. to 5:00 p.m. (all other offices), Monday through Friday. Nonresident Step-by-Step Instructions Step 1: Provide the following information Step 3: Figure the Illinois portion of your Line 1: Check the “Yes” box if federal adjusted gross income you were a full-year resident of Illinois during the tax year, or Column A – Federal Total your filing status is “married filing jointly” and your spouse was a In Column A of each line, except Line 19, enter the amounts exactly full-year resident of Illinois during the tax year. as reported on the corresponding line of your federal income tax return. Check the “No” box if Line 19, Other income, should not include any net operating you are not filing a joint return, and you were not a full-year loss (NOL) carryforward to this year that is available to carry forward to resident of Illinois during the tax year, or next year. See Form IL-1040, Line 1 instructions. you are filing a joint return, and neither you nor your spouse was If you filed a joint federal income tax return and are filing a a full-year resident of Illinois during the tax year. separate Illinois return, include in Column A only your share of the If you check the “Yes” box on Line 1, you cannot use amounts from your joint federal income tax return. Complete the Schedule NR. If you file your Illinois return indicating your filing Allocation Worksheet in the Form IL-1040 Instructions to determine status as “married filing jointly” and one spouse is a full-year your share of the amounts from your joint federal return. resident of Illinois, both spouses must use full-year residency status. Column B – Illinois Portion However, if you are filing a joint federal return and one spouse is an Illinois resident while the other is a full-year nonresident, you may Enter the portion of Column A, Federal Total, that is taxed by Illinois. choose to file with Illinois as “married filing separately.” In this case, To determine the taxable amount, you must read and follow the do not recompute any items on your federal return. Instead, you instructions for each line. must divide each item of income and deduction shown on your joint If you received an Illinois Schedule K-1-P or K-1-T, refer to federal return between your separate Illinois returns following the that form’s instructions to figure the amount to include on each line. Allocation Worksheet in the Form IL-1040 Instructions. The spouse Income filing as a nonresident must attach a completed Schedule NR. Line 5: Wages, salaries, tips, etc. Lines 2a and 2b: Full-year nonresidents, skip these lines. Enter the amount shown as Illinois wages on the Illinois copy of the Line 3: If you were a resident of Iowa, Kentucky, Michigan, or W-2 forms you received while you were a nonresident. Wisconsin, during any part of the tax year, were living in Illinois Do not include any Illinois wages you received while only to accompany your military service member spouse who was you were a resident of Iowa, Kentucky, Michigan, or Wisconsin. stationed in Illinois or if you elected to use your service member you were living in Illinois only to accompany your military spouse’s state of residence for tax purposes, check the appropriate service member spouse who was stationed in Illinois. box. you were living in Illinois and elected to use your military service If you check the military spouse box, attach the military member spouse’s state of residence for tax purposes. service member’s Form W-2 showing military wages. If the Illinois wages as shown on your W-2 are incorrect, you Line 4: If you claimed residency for tax purposes in 2022 in must attach a letter from your employer, on company letterhead, any state other than those listed on Line 3, enter the two-letter stating the the correct amount of Illinois wages and the number of abbreviation of the state(s) on the lines provided. work days performed in each state. If any of the compensation was earned in a prior tax year, (i.e. deferred compensation or exercised Step 2: Complete Form IL-1040 stock options), the statement must include a detailed calculation of Complete Lines 1 through 10 of your Form IL-1040 as if you were a how this income has been sourced. We will not accept a letter from full-year Illinois resident. Follow the Form IL-1040 Instructions. you or your tax preparer. If any of your wages are for military pay, be sure to complete Step 4, Line 44 and Schedule M. Page 2 of 10 IL-1040 Schedule NR Instructions (R-12/22) |
Enlarge image | Nonresident Instructions Line 6: Taxable interest both inside and outside Illinois, complete the IAF Worksheet on Interest income you received, other than business interest income, is Page 10 to figure the Illinois portion of that income, and include not taxed by Illinois. the amount from Line 3 of the worksheet. Business interest income you received as part of a business Line 13: Taxable IRA distributions conducted in Illinois is taxed by Illinois. If this income is from a Do not enter an amount on this line. As a nonresident, your IRA business conducted distributions are not taxed by Illinois. entirely in Illinois, enter the amount from Column A. Line 14: Taxable pensions and annuities both inside and outside Illinois, complete the IAF Worksheet on Do not enter an amount on this line. As a nonresident, your pensions Page 10 to figure the Illinois portion of that income, and include and annuities are not taxed by Illinois. the amount from Line 3 of the worksheet. Line 15: Rental real estate, royalties, partnerships, S Line 7: Ordinary dividends corporations, trusts, etc. Dividend income you received, other than business dividend income, Figure the total amount to enter on this line by adding is not taxed by Illinois. the net amount of income or loss, other than business income, Business dividend income you received as part of a business you received from conducted in Illinois is taxed by Illinois. If this income was received from a business conducted real estate located in Illinois. entirely in Illinois, enter the amount from Column A. tangible personal property, to the extent it was used in Illinois. both inside and outside Illinois, complete the IAF Worksheet on You can determine the extent of Illinois use of tangible Page 10 to figure the Illinois portion of that income, and include personal property by dividing the number of days the property the amount from Line 3 of the worksheet. was in Illinois during the rental or royalty period in the taxable year by the number of days the property was everywhere during Line 8: Taxable refunds, credits, or offsets of state and all rental or royalty periods in the taxable year. Multiply the local income taxes resulting fraction by the net amount of rents and royalties received. Enter the amount of any Illinois Income Tax refund you included in patents and copyrights (the amount that was used in Illinois). your taxable income because you claimed this refund as an itemized deduction on a previous year’s federal return. If you received this A patent is used in Illinois when it is employed in the refund from business taxes, include any refund amount to the extent production, fabrication, manufacturing, or other processing of a that the original deduction was allocated to Illinois. product, or when a patented product is produced in Illinois. A copyright is used in Illinois when the printing or publication Line 9: Alimony received originated in Illinois. Do not enter an amount on this line. As a nonresident, alimony you income or loss you received from an Illinois business. If your received is not taxed by Illinois. business was conducted Line 10: Business income or loss entirely in Illinois, include the amount from Column A. Business income or loss that you received as part of a business both inside and outside Illinois, complete the IAF Worksheet conducted in Illinois is taxed by Illinois. If your business income or on Page 10 to figure the Illinois portion of that income, loss was received from a business conducted and include the amount from Line 3 of the worksheet. entirely in Illinois, enter the amount from Column A. income or loss you received from partnerships, S corporations, both inside and outside Illinois, complete the IAF Worksheet on trusts, and estates as directed by Illinois Schedules K-1-P and K-1-T. Page 10 to figure the Illinois portion of that income, and include the amount from Line 3 of the worksheet. Line 16: Farm income or loss All farm income or loss you included on federal Schedule F, Profit Line 11: Capital gain or loss or Loss from Farming, and that you received from an Illinois farm is Enter any capital gains or losses, other than business capital gains taxed by Illinois. If your farm income or loss was received or losses, you received from the sale of real property or tangible entirely from Illinois sources, enter the amount from Column A. personal property located in Illinois at the time of the sale or from both inside and outside Illinois, complete the IAF Worksheet exchange. Nonbusiness capital gains or losses that resulted from on Page 10 to figure the Illinois portion of your farm income, and your sale of intangibles are not taxed by Illinois. include the amount from Line 3 of the worksheet. Capital gains or losses you received as part of a business conducted in Illinois are taxed by Illinois. If the business was conducted Line 17: Unemployment Compensation entirely in Illinois, enter the amount from Column A. Enter the total amount of unemployment compensation you received from the Illinois Department of Employment Security. both inside and outside Illinois, complete the IAF Worksheet on Page 10 to figure the Illinois portion of your capital gain or loss, Line 18: Taxable Social Security benefits and include the amount from Line 3 of the worksheet. Do not enter an amount on this line. As a nonresident, your Social Security benefits are not taxed by Illinois. You may include any capital loss amounts only to the extent those loss amounts were included in your federal adjusted gross Line 19: Other income income. Only include losses in Column B that are included in Column A. Line 12: Other gains or losses Enter the total amount of income that you received from Other gains or losses you received as part of a business conducted the Illinois State Lottery, Illinois gambling, and sports in Illinois are taxed by Illinois. All gains or losses that you included wagering winnings (even if you were a resident of a reciprocal on federal Form 4797, Sales of Business Property, are classified as state).Payments of winnings from sports wagering are conducted business income. in accordance with the Sports Wagering Act for tax years ending If this income or loss was received from a business conducted on or after December 31, 2021. entirely in Illinois, enter the amount from Column A. IL-1040 Schedule NR Instructions (R-12/22) Page 3 of 10 |
Enlarge image | Nonresident Instructions Line 28: Self-employed health insurance deduction the sale of your Illinois State Lottery installment payments. Figure the amount of your Illinois deduction by completing the a business net operating loss (NOL) from an earlier year that is following calculation using the ISE decimal, and enter the amount on being carried forward. If your loss was derived Line 28, Column B. from a partnership or an S corporation, the loss is allocated to . × = $ Illinois to the same extent that business income from that entity is ISE decimal Column A, Line 28 Column B, Line 28 apportioned to Illinois on the Illinois Schedule K-1-P for this year. If this deduction is for health insurance premiums paid for you (or from a business you conducted entirely in Illinois, the reimbursed to you) by an S corporation and reported to you as entire amount is allocated to Illinois. wages, include the amount in Column B if your wages from the from a business you conducted inside and outside Illinois, S corporation are included in Line 5, Column B. figure the Illinois portion on the IAF Worksheet, Page 10, and Line 29: Penalty on early withdrawal of savings include the amount from Line 3 of the worksheet. Enter the penalty amount you paid when you withdrew money from a a recovery or reimbursement for a deduction claimed in a prior business savings account earning interest that is allocated to Illinois. year to the extent that the deduction was allocated to Illinois. If only a portion of the interest on the account is allocated to Illinois, Line 20: Follow the instructions on Schedule NR. allocate the same portion of this penalty to Illinois. Adjustments to Income Line 30: Alimony paid Line 21: Follow the instructions on Schedule NR. Enter the amount of alimony you paid during the tax year as shown in Column A. Line 22: Educator expenses Write the amount of educator expenses you deducted this year that Line 31: IRA deduction were incurred in connection with your Illinois employment. Figure the amount of your Illinois IRA deduction by completing the calculation below, and enter the result on Line 31, Column B. Line 23: Certain business expenses of reservists, performing artists, and fee-basis government officials ÷ = Wages, salaries, tips, earned income Wages, salaries, tips, alimony, earned Enter the amount of business expenses you deducted this year received from an Illinois source income received from all sources for which the related compensation is allocable to Illinois. If only a portion of the compensation related to your total business expenses shown in Column A is allocated to Illinois, allocate the same portion × $= Decimal Column A, Line 31 Column B, Line 31 of these expenses to Illinois in Column B. Line 32: Student loan interest deduction Line 24: Health savings account deduction Enter the amount of student loan interest you deducted this year as Enter the amount of health savings account deduction you claimed shown in Column A. this year as shown in Column A. Line 33: RESERVED Line 25: Moving expenses for members of the Armed Forces Line 34: Archer MSA deduction Enter the amount of expenses you paid if you are a member of the Enter the amount of Archer MSA deduction you received this year as Armed Forces on active duty and, due to a military order, you move shown in Column A. to Illinois because of a permanent change of station. See Federal Line 35: Other adjustments Form 3903 Instructions. Use this line only if the Internal Revenue Service instructs you to Self-employment decimal for Lines 26, 27, and 28 include an amount on your federal Form 1040 or 1040-SR, Schedule Complete the following calculation to determine your Illinois 1, Line 24 that is not listed as a separate line item on the federal self-employment (ISE) decimal for use on Lines 26, 27, and 28. The Form 1040 or 1040-SR, Schedule 1, Lines 11 through 23. Include ISE decimal may not exceed 1.0 or be less than zero. only the amount of unlisted items, not the Line 25 total. If the federal adjustment is ÷ = . Self-employment Self-employment income Illinois self- an item of income, you may include the subtraction in Column B income included on federal Schedule SE employment (ISE) only if the amount is included as income in Column B on another in Column B Part I, Line 3 decimal plus 5a line of this Schedule NR. Line 26: Deductible part of self-employment tax an expenditure related to income, you may include in Column B Figure the amount of your Illinois deduction for self-employment tax the same percentage of Column A as the percentage of the total by completing the following calculation, and enter the amount on related income included in Column B on any line of this schedule. Line 26, Column B. an expenditure unrelated to income, you may include in Column B the amount from Column A. . × = $ ISE decimal Column A, Line 26 Column B, Line 26 Lines 36 through 38: Follow the instructions on Schedule NR. Line 27: Self-employed SEP, SIMPLE, and qualified plans Step 4: Figure your Illinois additions and Figure the amount of your Illinois deduction by completing the following calculation using the ISE decimal, and enter the amount on subtractions Line 27, Column B. Column A – Form IL-1040 Total . × = $ Enter the amounts in Column A from your Form IL-1040 by following ISE decimal Column A, Line 27 Column B, Line 27 the instructions on Schedule NR. Page 4 of 10 IL-1040 Schedule NR Instructions (R-12/22) |
Enlarge image | Nonresident Instructions Column B – Illinois Portion Line 44: Other subtractions To determine the Illinois portion of additions and subtractions, you Include the total amount of the following: must read and follow the instructions for each line. “Bright Start” or “Bright Directions” College Savings Pool Partnerships, S corporations, trusts, or estates contributions and “College Illinois” Prepaid Tuition Program If you received an Illinois Schedule K-1-P or K-1-T, refer to that contributions from your Schedule M, Other Additions and form’s instructions to figure the amount to include on each line. Subtractions for Individuals, Line 13. Restoration of amounts held under claim of right from your Additions Schedule M, Line 15. Line 39: Federally tax-exempt interest and dividend income Contributions to a job training project from your Schedule M, Interest and dividends, except from a business, are not taxed by Line 16. Illinois. Federally tax-exempt interest income you received as part of Use the instructions for each of the following items to figure the a business conducted in Illinois is taxed by Illinois. If this income was amount to include: received Enter the amount of the following items from your Schedule NR, entirely from Illinois sources, enter the amount from Column A. Column A, Line 44 that is included as income in Column B of any both inside and outside Illinois, complete the IAF Worksheet on line of your Schedule NR. Page 10 to figure the Illinois portion of that income, and include the amount from Line 3 of the worksheet. August 1, 1969, valuation limitation River Edge Redevelopment Zone and High Impact Line 40: Other additions Business Dividend Subtraction Include the following: any distributive share of additions received from partnerships, Ridesharing money and other benefits S corporations, trusts, and estates as reported on Schedules Payment of life insurance, endowment, or annuity benefits K-1-P and K-1-T. received any Lloyd’s plan of operation loss if reported on your behalf Lloyd’s plan of operation income if reported on your on Form IL-1065, Partnership Replacement Tax Return, and behalf on Form IL-1065 included in your adjusted gross income. Illinois Pre-Need Cemetery Sales Act trust income any nonbusiness amount you reported on Form IL-4562, Education loan repayments to primary care physicians Special Depreciation, that resulted from Illinois property. Reparations or other amounts received as a victim of any business amounts you reported on Form IL-4562 and the persecution by Nazi Germany addition for Student-Assistance Contribution Credit claimed on Interest from obligations of Illinois state and local government Schedule 1299-C, Income Tax Subtractions and Credits. If the amount was incurred in a business conducted Your child’s interest income reported on federal Form 8814 Military pay - Enter the amount of military pay you received entirely in Illinois, include the amount from Column A. for duty in the U.S. Armed Forces. This income must be included both inside and outside Illinois, complete the IAF Worksheet on in your federal adjusted gross income and in Column B, Line 5. Page 10 to figure the Illinois portion of these amounts, and include the amount from Line 3 of the worksheet. U.S. government obligations - Enter the amount of any interest income from U.S. Treasury bonds, bills, notes, savings bonds, business expense recapture if you reported income from an asset and U. S. agency interest you included in Column B, Line 6. or activity as business income in prior years and reported any income from that asset or activity as nonbusiness income on your Distributive share of subtractions from a partnership, Schedule NR for this year. Enter the amount of business expense S corporation, trust, or estate - Enter the nonresident member’s recapture included in Column A multiplied by the greater of or beneficiary’s share apportioned or allocated to Illinois and reported to you on Column B of the Schedule K-1-P or Schedule the decimal on Line 1 of the IAF Worksheet on Page 10, or K-1-T from the partnership, S corporation, trust, or estate. the decimal on Line 1 of the IAF Worksheet for this year plus the IAF decimals for your two most recent years, divided by 3. Expenses of federally tax-exempt income and federal credits - If you filed Schedule NR for only one prior year, add the IAF For expenses related to decimal from that year’s Schedule NR and the IAF decimal federal credits, include the amount from Column A. from this year’s Schedule NR, and divide by 2. income that is exempt from federal taxation, multiply the recapture of deductions for contributions to Illinois college amount in Column A by the percentage of that income included savings plans and ABLE plans transferred to an out-of-state plan. in Column B of your Schedule NR for the line on which this recapture of deductions for contributions to college savings plans income was added back to your base income. withdrawn for nonqualified expenses or refunded. Special Depreciation subtraction -Enter any amount Line 41: Follow the instructions on Schedule NR. you reported on Form IL-4562, Special Depreciation. If this depreciation was incurred in a business conducted Subtractions entirely in Illinois, include the amount from Column A. Line 42: Federally taxed Social Security and retirement both inside and outside Illinois, complete the IAF Worksheet income on Page 10 to figure the Illinois portion of that income, and Do not enter an amount on this line. As a nonresident, federally include the amount from Line 3 of the worksheet. taxed Social Security and retirement income are not taxed by Illinois Contributions made to a qualified Illinois ABLE account - and should not be included in Column B, Lines 13, 14, or 18. from your Schedule M, Other Additions and Subtractions for Line 43: Illinois Income Tax overpayment Individuals, Line 20. Enter the amount of any Illinois Income Tax overpayment that you Recovery of items previously deducted on federal Form 1040, included in Column B, Line 8. Schedule A - Enter any amount from Column A that is included as income in Column B, Line 8 or Line 19. IL-1040 Schedule NR Instructions (R-12/22) Page 5 of 10 |
Enlarge image | Nonresident/Part-Year Resident Instructions Non-U.S. bond interest - Enter the amount of any interest Distributions from “Bright Start,” “Bright Directions,” and income from bonds issued by the governments of Guam, “College Illinois” college savings plans - Enter the Puerto Rico, or the Virgin Islands, or the mutual mortgage amount of distributions you included in Line 37 because you insurance fund that you included in Column B, Line 6 or Line 39. claimed a federal American Opportunity or Lifetime Learning Railroad sick pay and railroad unemployment - Enter any Credit to the extent you included the distributions in Line 38. amount from Column A that is included as income in Column B, Line 45 – Follow the instructions on Schedule NR. Line 5. Unjust imprisonment compensation awarded by Illinois Step 5: Figure your Illinois income and Court of Claims - Do not enter an amount on this line. tax Lines 46 through 52 – Follow the instructions on Schedule NR. Part-Year Resident Step-by-Step Instructions Step 1: Provide the following information moved out of Illinois before December 31, 2022, enter the actual Line 1: Check the “Yes” box if month, day, and year you moved out of Illinois. you were a full-year resident of Illinois during the tax year, or Line 3: If you were a resident of Iowa, Kentucky, Michigan, or Wisconsin, during any part of the tax year or were living in Illinois your filing status is “married filing jointly,” and your spouse was a only to accompany your military service member spouse who was full-year resident of Illinois during the tax year. stationed In Illinois, check the appropriate box. Check the “No” box if If you check the military spouse box, attach the military you are not filing a joint return, and you were not a full-year service member’s Form W-2 showing military wages. resident of Illinois during the tax year, or you are filing a joint return, and neither you nor your spouse was Line 4: If you earned income or filed an income tax return in any a full-year resident of Illinois during the tax year. state other than those listed on Lines 2 and 3, enter the two-digit abbreviation of the state(s) on the lines provided. If you check the “Yes” box on Line 1, you cannot use Schedule NR. If you file your Illinois return indicating your filing status as “married filing jointly” and one spouse is a full-year resident Step 2: Complete Form IL-1040 of Illinois, you must file your return using full-year residency status. Complete Lines 1 through 10 of your Form IL-1040 as if you were a However, if you are filing a joint federal return and one spouse is full-year Illinois resident. Follow the Form IL-1040 Instructions. an Illinois resident while the other is a part-year resident, you may choose to file with Illinois as “married filing separately.” In this case, Step 3: Figure the Illinois portion of your do not recompute any items on your federal return. Instead, you federal adjusted gross income must divide each item of income and deduction shown on your joint federal return between your separate Illinois returns following the Column A – Federal Total Allocation Worksheet in the Form IL-1040 Instructions. The spouse In Column A of each line, except Line 19, enter the amounts exactly filing as a part-year resident must attach a completed Schedule NR. as reported on the corresponding line of your federal income tax As a part-year resident, you may be allowed to take a credit against return. Illinois Income Tax for income tax you paid to another state if the Line 19, Other income, should not include any net operating income you earned while an Illinois resident is also being taxed by loss (NOL) carryforward to this year that is available to carry forward to another state. See the instructions for Form IL-1040, Line 16 and next year. See Form IL-1040, Line 1 instructions. Schedule CR, Credit for Tax Paid to Other States. If you filed a joint federal income tax return and are filing a Line 2a: Enter the dates that you lived in Illinois during the tax separate Illinois return, include in Column A only your share of the year, the name of the other state where you lived during the tax year, amounts from your joint federal income tax return. Complete the and the dates you lived in the other state. Attach a separate sheet of Allocation Worksheet in the Form IL-1040 Instructions to determine paper with this information if you need more room. your share of the amounts from your joint federal return. Line 2b: If your filing status is “married filing jointly,” enter the dates Column B – Illinois Portion your spouse lived in Illinois during the tax year, the name of the Enter the portion of Column A, Federal Total, that is taxed by Illinois. other state where your spouse lived during the tax year, and the To determine the taxable amount, you must read and follow the dates your spouse lived in the other state. Attach a separate sheet of instructions for each line. As a part-year resident, you must include paper with this information if you need more room. the income you received from any source during the time you were You must enter dates that fall within the tax year (January a resident, plus the Illinois income you received during the time you 2022 through December 2022, for calendar-year filers) on Lines 2a were a nonresident. and 2b. For example, if you or your spouse If you received an Illinois Schedule K-1-P or K-1-T, refer to began living in Illinois on or before January 1, 2022, enter that form’s instructions to figure the amount to include on each line. 01/01/22. For the purposes of determining if income was received by you began living in Illinois after January 1, 2022, enter the actual while you were an Illinois resident, all income from these entities is month, day, and year you began living in Illinois. considered received on the last day of the entity’s tax year. moved out of Illinois on or after December 31, 2022, enter 12/31/22. Page 6 of 10 IL-1040 Schedule NR Instructions (R-12/22) |
Enlarge image | Part-Year Resident Instructions Income both inside and outside Illinois. Complete the IAF Worksheet on Line 5: Wages, salaries, tips, etc. Page 10 to figure the Illinois portion of your business income, and Enter the amount of all wages you received as an Illinois resident, include the amount from Line 3 of the worksheet. including wages received from employment in Iowa, Kentucky, Line 11: Capital gain or loss Michigan, or Wisconsin. Enter any capital gains or losses from Column A you received as Also include all Illinois wages you received while you were a an Illinois resident. Include any capital gains or losses, other than nonresident. These wages are identified as Illinois wages on the business capital gains or losses, you received while a nonresident Illinois copy of your W-2 forms. and that were associated with the sale of real property or tangible Do not include any Illinois wages you received while personal property located in Illinois at the time of the sale or you were a resident of Iowa, Kentucky, Michigan, or Wisconsin. exchange. you were living in Illinois only to accompany your military Also, include any capital gains or losses you received while a service member spouse who was stationed in Illinois. nonresident from an Illinois business conducted you were living in Illinois and elected to use your military service entirely in Illinois. member spouse’s state of residence for tax purposes. both inside and outside Illinois. Complete the IAF Worksheet on If the Illinois wages as shown on your W-2 are incorrect, you Page 10 to figure your Illinois portion, and include the amount must attach a letter from your employer, on company letterhead, from Line 3 of the worksheet. stating the correct amount of Illinois wages and Illinois Income Tax You may include any capital loss amounts only to the extent withheld. We will not accept a letter from you or your tax preparer. those loss amounts were included in your federal adjusted gross If any of your wages are for military pay, be sure to complete income. Step 4, Line 44 and Schedule M. Line 12: Other gains or losses Line 6: Taxable interest Enter the total amount of other gains or losses from Column A you Enter the total amount of interest income from Column A you received as an Illinois resident and any amount you received while received as an Illinois resident. Also, include any business interest you were a nonresident from an Illinois business conducted income you received while you were a nonresident and that you entirely in Illinois. received from an Illinois business conducted both inside and outside Illinois. Complete the IAF Worksheet on entirely in Illinois. Page 10 to figure the Illinois portion of that income, and include the amount from Line 3 of the worksheet. both inside and outside Illinois. Complete the IAF Worksheet on Page 10 to figure the Illinois portion of that income, and include Line 13: Taxable IRA distributions the amount from Line 3 of the worksheet. Enter the amount of IRA distributions from Column A you received Interest income you received while you were a nonresident, other as an Illinois resident, regardless of where you were a resident when than business interest income, is not taxed by Illinois. you made the contributions. Line 7: Ordinary dividends Line 14: Taxable pensions and annuities Enter the total amount of dividend income from Column A you Enter the amount of pensions and annuities from Column A you received as an Illinois resident. Also, include business dividend received as an Illinois resident, regardless of the source. income you received while you were a nonresident and that you Line 15: Rental real estate, royalties, partnerships, S received from an Illinois business conducted corporations, trusts, etc. entirely in Illinois. Enter the total amount of income or loss from Column A you both inside and outside Illinois. Complete the IAF Worksheet on received as an Illinois resident. Include any amount you received Page 10 to figure the Illinois portion of that income, and include from Illinois sources while you were a nonresident. Add the total the amount from Line 3 of the worksheet. net amount of income or loss, other than business income, that Any dividend income you received while a nonresident, other than you received from business dividend income, is not taxed by Illinois. real estate located in Illinois. Line 8: Taxable refunds, credits, or offsets of state and tangible personal property, to the extent it was used in Illinois. local income taxes Enter the amount of any income tax refund from Column A you You can determine the extent of Illinois use of tangible received as an Illinois resident and any Illinois Income Tax refund personal property by dividing the number of days the you received while you were a nonresident. Include these refunds property was in Illinois during the rental or royalty period in only if they are included in your taxable income because you the taxable year by the number of days the property was claimed them as itemized deductions on a previous year’s federal everywhere during all rental or royalty periods in the taxable return. year. Multiply the resulting fraction by the net amount of rents and royalties received. If you received a refund from business taxes, you must include any refund you received as a nonresident to the extent that the original patents and copyrights (the amount used in Illinois). deduction was allocated to Illinois. A patent is used in Illinois when it is employed in the Line 9: Alimony received production, fabrication, manufacturing, or other processing of a Enter the amount of alimony you received as an Illinois resident. product, or when a patented product is produced in Illinois. Line 10: Business income or loss A copyright is used in Illinois when the printing or publication Enter the amount of business income or loss from Column A you originated in Illinois. received as an Illinois resident. Also, include the amount of business income or loss you received from an Illinois business conducted income or loss you received while a nonresident and that you entirely in Illinois. received from an Illinois business conducted both inside and outside Illinois. Complete the IAF Worksheet on entirely in Illinois. Page 10 to figure the Illinois portion of that income, and include the amount from Line 3 of the worksheet. IL-1040 Schedule NR Instructions (R-12/22) Page 7 of 10 |
Enlarge image | Part-Year Resident Instructions income or loss from partnerships, S corporations, trusts, and Line 24: Health savings account deduction estates as directed on Illinois Schedules K-1-P and K-1-T. Enter the amount of health savings account deduction you claimed Line 16: Farm income or loss this year as shown in Column A. Enter the total amount of farm income or loss from Column A you Line 25: Moving expenses for members of the Armed received as an Illinois resident. Also, include farm income or loss Forces you received while a nonresident if this income or loss was received Enter the amount of moving expenses you paid if you are a member entirely from Illinois sources. of the Armed Forces on active duty and, due to a military order, from both inside and outside Illinois. Complete the IAF Worksheet you move to Illinois because of a permanent change of station. See on Page 10 to figure the Illinois portion of your farm income, and Federal Form 3903 Instructions. If you moved outside of Illinois, you include the amount from Line 3 of the worksheet. must provide receipts showing the expenses were paid while you were Line 17: Unemployment Compensation an Illinois resident. Enter the total amount of unemployment compensation from Column Self-employment decimal for Lines 26, 27, and 28 A you received while you were an Illinois resident and the total Complete the following calculation to determine your Illinois amount of unemployment compensation you received from the self-employment (ISE) decimal for use on Lines 26, 27, and 28. The Illinois Department of Employment Security as a nonresident. ISE decimal may not exceed 1.0 or be less than zero. Line 18: Taxable Social Security benefits Enter the total amount of Social Security income from Column A you ÷ = . Self-employment Self-employment income Illinois self- received as an Illinois resident. income included on federal Schedule SE employment (ISE) in Column B Part I, Line 3 decimal Line 19: Other income plus 5a Only include losses in Column B that are included in Column A. Line 26: Deductible part of self-employment tax Enter the total amount of other income from Column A you received Figure the amount of your Illinois deduction for self-employment tax as an Illinois resident, plus any amount you received while you were by completing the following calculation, and enter the amount on a nonresident from Line 26, Column B. the Illinois State Lottery, sports wagering, and Illinois gambling winnings (even if you were a resident of a reciprocal . × = $ state). Payments of winnings from sports wagering are conducted ISE decimal Column A, Line 26 Column B, Line 26 in accordance with the Sports Wagering Act for tax years ending Line 27: Self-employed SEP, SIMPLE, and qualified plans on or after December 31, 2021. Figure the amount of your Illinois deduction by completing the the sale of your Illinois State Lottery installment payments. following calculation using the ISE decimal, and enter the amount on a business net operating loss (NOL) from an earlier year that is Line 27, Column B. being carried forward. If your loss was derived . × = $ from a partnership or an S corporation, the loss is allocated to ISE decimal Column A, Line 27 Column B, Line 27 Illinois to the same extent that business income from that entity is apportioned to Illinois on the Illinois Schedule K-1-P for this Line 28: Self-employed health insurance deduction year. Figure the amount of your Illinois deduction by completing the following calculation using the ISE decimal, and enter the amount on from a business you conducted entirely in Illinois, the Line 28, Column B. entire amount is allocated to Illinois. from a business you conducted inside and outside Illinois, . × = $ figure the Illinois portion on the IAF Worksheet, Page 10, and ISE decimal Column A, Line 28 Column B, Line 28 include the amount from Line 3 of the worksheet. If this deduction is for health insurance premiums paid for you (or a recovery or reimbursement for a deduction from a prior year to reimbursed to you) by an S corporation and reported to you as the extent that the deduction was allocated to Illinois. wages, include the amount in Column B if your wages from the S Line 20: Follow the instructions on Schedule NR. corporation are included in Line 5, Column B. Adjustments to Income Line 29: Penalty on early withdrawal of savings Enter the amount from Column A you paid as an Illinois resident Line 21: Follow the instructions on Schedule NR. when you withdrew money from a savings account plus any penalty Line 22: Educator expenses you paid while a nonresident that is allocated to Illinois. If only a Write the amount of educator expenses from Column A you portion of the interest on the account is allocated to Illinois, allocate established this year in connection with your the same portion of this penalty to Illinois. employment while you were an Illinois resident, or Line 30: Alimony paid Illinois employment while you were a nonresident. Enter the amount of alimony you paid during the tax year as shown Line 23: Certain business expenses of reservists, in Column A. performing artists, and fee-basis government officials Line 31: IRA deduction Enter the amount of business expenses you deducted this year Figure the amount of your Illinois IRA deduction as follows, and for which the related compensation is allocable to Illinois. If only a enter the amount on Line 31, Column B. portion of the compensation related to your total business expenses shown in Column A is allocated to Illinois, allocate the same portion ÷ = of these expenses to Illinois in Column B. Wages, salaries, tips, alimony, Wages, salaries, tips, alimony, earned earned income included in Column B income received from all sources × = $ Decimal Column A, Line 31 Column B, Line 31 Page 8 of 10 IL-1040 Schedule NR Instructions (R-12/22) |
Enlarge image | Part-Year Resident Instructions Line 32: Student loan interest deduction Enter the total Illinois amount of other additions. Enter the amount of student loan interest you deducted this year as Line 41: Follow the instructions on Schedule NR. shown in Column A. Subtractions Line 33: RESERVED Line 42: Federally taxed Social Security and retirement Line 34: Archer MSA deduction income Enter the amount of Archer MSA deduction you received this year as Enter the amount of federally taxed Social Security and retirement shown in Column A. income from Column A you received as an Illinois resident and Line 35: Other adjustments that is included in the Illinois portion of your federal adjusted gross Use this line only if the Internal Revenue Service instructs you to income, Line 38. For most taxpayers, this is the total of Column B, include an amount on your federal Form 1040 or 1040-SR, Schedule Lines 13, 14, and 18. 1, Line 24 that is not listed as a separate line item on the federal Line 43: Illinois Income Tax overpayment Form 1040 or 1040-SR, Schedule 1, Lines 11 through 23. Include Enter the amount of any Illinois Income Tax overpayment you only the amount of unlisted items, not the Line 25 total. included in Column B, Line 8. If the federal adjustment is Line 44: Other subtractions an item of income, you may include the subtraction in Column B See the nonresident instructions for Line 44 for a list of other only if the amount is included as income in Column B on another subtractions. Include each of the items you received or incurred line of this Schedule NR. while an Illinois resident. You must include on this line the Illinois an expenditure related to income, you may include in Column B portion of any deductible interest income reported on federal Form the same percentage of Column A as the percentage of the total 8814. related income included in Column B on any line of this Schedule NR. Also, include the amount of the items you received while a an expenditure unrelated to income, you may include in nonresident to the extent required in the nonresident instructions for Column B the amount from Column A. Line 44. Lines 36 through 38 - Follow the instructions on Schedule NR. Line 45 – Follow the instructions on Schedule NR. Step 4: Figure your Illinois additions and Step 5: Figure your Illinois income and subtractions tax Column A — Form IL-1040 Total Lines 46 through 52 – Follow the instructions on Schedule NR. Enter the amounts in Column A from your Form IL-1040 by following the instructions on Schedule NR. Column B — Illinois Portion To determine the Illinois portion of additions and subtractions, you must read and follow the instructions for each line. Additions Line 39: Federally tax-exempt interest and dividend income Enter the amount of federally tax-exempt interest from Column A you received as an Illinois resident. Interest and dividends, other than from a business, you received while a nonresident are not taxed by Illinois. Include any federally tax-exempt interest income you received while a nonresident that came from an Illinois business conducted entirely in Illinois. Include the amount from Column A. both inside and outside Illinois. Complete the IAF Worksheet on Page 10 to figure the Illinois portion of that income, and include the amount from Line 3 of the worksheet. Line 40: Other additions See the nonresident instructions for Line 40 for a list of other additions. Include each of the items from Column A that you received or incurred while an Illinois resident. You must also include on this line the Illinois portion of any federally tax-exempt interest income reported on federal Form 8814 and any earnings distributed from IRC Section 529 college savings programs you received while you were a resident if they are not included in your federal adjusted gross income. Also, include the amount of the items you received while a nonresident to the extent required in the nonresident instructions for Line 40. IL-1040 Schedule NR Instructions (R-12/22) Page 9 of 10 |
Enlarge image | Business or Farm Income Apportionment Formula (IAF) Worksheet You must complete this worksheet if, while a nonresident of Illinois, you received business or farm income from both inside and outside of Illinois. If you have more than one source of business or farm income, make copies of this worksheet and prepare a separate worksheet for each line of the Schedule NR on which you reported business income. Worksheet for Schedule NR, Line Column A Column B Column C Total sales everywhere Total sales inside Illinois Apportionment Factor Column B ÷Column A 1 Figure your apportionment factor. 1 2 Enter the amount of your business or farm income from Schedule NR, Column A. 2 3 Apportioned Income – Multiply Line 2 by the Line 1 decimal. Enter the result here and on the corresponding line on Schedule NR, Column B. 3 Keep a copy of this worksheet with your income tax records. IAF Worksheet Instructions Line 1: Apportionment factor Line 3: Apportioned income Multiply the amount of your business or farm income, Line 2, by the Column A apportionment factor, Line 1 decimal. Enter the result on Line 3 and Enter the total amount of sales you received from both inside and on the corresponding line of Schedule NR, Column B. outside Illinois. If you need more detailed instructions, see the instructions Column B for Form IL-1120, Corporation Income and Replacement Tax Enter the total amount of sales you received in Illinois. Return, Step 4. If your business income was derived from a transportation company, an insurance company, or a financial Column C organization, see Form IL-1120 Specific Instructions for Divide Column B by Column A. Carry the decimal to six places. “Apportionment Formulas.” This is your apportionment factor. Line 2: Business or farm income Enter the amount of your business or farm income from the appropriate line on Schedule NR, Column A. IL-1040 Schedule NR Instructions (R-12/22) Page 10 of 10 |