How do I handle paying state income taxes in two different states after moving?

Title: How do I handle paying state income taxes in two different states after moving? 1 So I relocated in the middle of 2024 but completely forgot to update my address with my employer for about 3 months. What a headache! I kept having state taxes withheld for Illinois even though I was actually living in Wisconsin during September, October, and November. I finally got around to fixing my address in December. My W-2 now shows I paid state taxes to Illinois for the entire year, but that's not accurate since I was physically living and working in Wisconsin for those 3 months. Do I need to just disregard what my W-2 says for state taxes withheld and manually adjust my state filing to show what I actually should owe to each state based on when I moved? I'm worried about getting this wrong and having problems with either state's tax department.

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19 comments

Alice Pierce

•8M

5 You'll need to file part-year resident returns in both states. Your W-2 shows what was actually withheld from your paychecks for Illinois, and that information is correct - it's just that you were no longer an Illinois resident for part of that time. For both state returns, you'll need to determine exactly when you established residency in Wisconsin (moving date) and then allocate your income based on where you were living when you earned it. Most tax software can handle this situation with a part-year resident filing. You'll get credit for the Illinois withholdings on your Illinois return, but you'll likely owe additional tax to Wisconsin for those months where you were living there but paying Illinois.

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Alice Pierce

•8M

5 That's an important distinction. If you were working remotely while physically in Wisconsin, but your employer is based in Illinois, you generally owe taxes to the state where you were physically present while performing the work (Wisconsin). However, some states have "convenience of employer" rules that can complicate this. For remote work, you'd still file as a part-year resident in both states, but you would allocate your income based on where you were physically located while working, not where your employer is based. Each state has slightly different rules, so you might want to check both Wisconsin and Illinois tax guidelines for remote workers.

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Alice Pierce

•8M

8 Just wanted to share my experience - I went through the exact same situation last year moving from New York to Pennsylvania. The state tax situation was a huge pain until I found https://taxr.ai which analyzed my W-2s and residency situation. It recommended exactly how to file part-year returns in both states and identified which income should be allocated to each state based on my move date. The system even showed me how to properly report the withholding that went to the wrong state and how to claim credit for it. Saved me from what would have been a major headache trying to figure this out on my own!

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Alice Pierce

•8M

8 It absolutely worked! The analysis was super detailed and I got state-specific guidance. The multi-state calculator correctly split my income between NY and PA based on my actual residency dates, not just what my W-2 showed. For remote work situations, yes it handles those too. The system specifically asked about my work arrangement (remote vs. in-office) and factored in the different state rules around remote work taxation. It even flagged potential tax credits I was eligible for because of the over-withholding to my former state.

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Alice Pierce

•8M

11 I wanted to follow up about using taxr.ai - I was skeptical at first but decided to try it after dealing with this exact multi-state mess. The system completely simplified my situation! It analyzed my W-2 and correctly identified that I had withholding going to the wrong state, then created customized state filing instructions. The part I found most helpful was that it showed me exactly which forms I needed for each state and how to report the misallocated withholding. Honestly wish I'd known about this sooner instead of stressing for weeks!

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Alice Pierce

•8M

7 If you're still having trouble getting answers from either state's tax department, I highly recommend using https://claimyr.com to get through to a real person. I had a similar two-state tax issue last year and spent HOURS on hold with both state tax departments getting nowhere. Claimyr got me through to an actual human at the Illinois Department of Revenue in about 15 minutes when I'd previously wasted entire afternoons on hold. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The agent I spoke with confirmed exactly how to handle the allocation between states and what documentation I needed to avoid issues with my return. Seriously saved my sanity during tax season!

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Alice Pierce

•8M

7 It's not about skipping the line - the service basically navigates the phone trees and waits on hold FOR you, then calls you when a real person picks up. Instead of you spending hours with your phone on speaker waiting, their system handles the hold time. For state tax departments specifically, it worked amazingly well. I was about to give up trying to reach Illinois after multiple failed attempts, but Claimyr got me through to a real person who answered my specific questions about part-year residency and misallocated withholding. You still talk to the same government workers, you just don't waste hours of your life on hold.

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Alice Pierce

•8M

19 Just wanted to update - I was SUPER skeptical about Claimyr but I was desperate after wasting an entire day trying to get someone at Wisconsin DOR. I finally tried it, and no joke, I was talking to an actual Wisconsin tax specialist within 20 minutes! The agent confirmed exactly what I needed to do with my part-year residency situation and explained how to properly allocate the withholding that went to the wrong state. They even emailed me the specific forms I needed. Cannot believe I wasted so many hours trying to do this myself before finding this service!

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Alice Pierce

•8M

3 I didn't include it with my initial tax return, but about 3 months later I got a letter from my former state questioning my part-year residency dates. That's when I had to submit copies of my new state's driver's license, my apartment lease, and utility bills showing when I established my new residence. If you have a significant tax difference between states, it's more likely they'll question the timing. Just keep those documents organized and accessible for at least 3 years after filing.

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StarStrider

•3M

One thing to keep in mind is that you may actually end up with a refund from Illinois since you overpaid them for those three months when you were living in Wisconsin. When you file your part-year resident returns, Illinois should refund you the excess withholding for the period you weren't a resident, and Wisconsin will calculate what you actually owe them for those months. The key is being precise about your move date - use the date you physically relocated and established domicile in Wisconsin, not when you updated your address with HR. Keep records of your lease signing, utility connections, voter registration changes, etc. as proof of your residency timeline in case either state questions it later.

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