Resident of Illinoins but worked and payroll run in Michigan.
I lived in Illinois for all of 2010, but worked for a Michigan firm that paid the taxes
in Michigan. I filed state tax returns
in both IL and MI (as a Non-resident) using TaxAct software
. On line 17 of the IL tax return
tax paid to another state while an Illinois resident) I entered a certain amount (e.g. $1234.56).
Now, I received a letter from Illinois Dept of Revenue that they changed "credit
for tax paid to other states on Line 17. Illinois residents may not claim a credit for tax paid on wages or other employee compensation
received from employers in Iowa, Kentucky, Michigan and Wisconsin, because IL residents are covered by a reciprocal agreement and are not taxed on this income by these states. If you disagree with our changes, you must send us
copies of your out-of-state returns." They are asking that I pay this $1234.56 to Illinois.
On my Michigan tax returns, I paid e.g. $2345.67 and got a small refund e.g. $456.78 refund. Is there someplace on my Michigan return that says I was indeed taxed on this income in Michigan also? and that I do not have to pay this amount ($1234.56) being asked by Illinois?
Pl. advise. Also, let me know if I need to know or look out for something else.