Work in Illinois, Live in Missouri: How Taxes Work

Reciprocity

Do Illinois and Missouri Have a Tax Reciprocity Agreement?

No. Illinois and Missouri do not have a reciprocity agreement for income tax. Illinois maintains reciprocity with Iowa, Kentucky, Michigan, and Wisconsin only. Missouri is not on that list.

Without reciprocity, both states claim a right to tax the same wages. Illinois taxes nonresidents on income earned within the state. Missouri taxes its residents on all income from every source. The mechanism that prevents double payment is a tax credit on your Missouri return, not an exemption from filing in Illinois.

For Missouri residents commuting to jobs in the Metro East area, to employers on the Illinois side of the St. Louis metro, or anywhere else in Illinois, the absence of reciprocity means filing two state returns every year. Your Illinois employer is legally required to withhold Illinois tax from your pay, and you cannot file a form to redirect that withholding to Missouri.

St. Louis does not allow individuals to file extensions on their earnings tax returns, and each taxpayer is responsible for paying the tax even if the employer did not withhold it. Kansas City requires all its taxes to be filed electronically since January 1, 2025.

Filing Obligations

Which Tax Returns Do I File as a Missouri Resident Working in Illinois?

File the Illinois nonresident return first. You need the final Illinois tax figure to calculate your credit on the Missouri return. On Form IL-1040 with Schedule NR, report only your Illinois-source income. Schedule NR separates your income into the portion taxable by Illinois and the portion that is not.

On your Missouri MO-1040, report all income from every source, starting with your federal adjusted gross income. Attach Form MO-CR to claim credit for Illinois taxes paid. Include a copy of your completed Illinois return as supporting documentation. The credit calculation on MO-CR requires your final Illinois tax liability, which is why the Illinois return should be completed before the Missouri return.

Both returns are due April 15. Missouri grants an automatic extension to file if you filed a federal extension; Form MO-60 matters when you expect to owe or need a Missouri-only extension. Illinois grants an automatic six-month extension of time to file, and a longer federal extension carries over. If you owe a balance to either state, interest accrues from the original due date even if you file on extension.

Resident Credit

How Does Missouri's Credit Prevent Double Taxation?

Missouri taxes residents on all income. Illinois taxes nonresidents on income earned within the state. Without a credit, you would owe both states' full rates on the same wages. Missouri's Form MO-CR credit eliminates this overlap.

The credit equals the lesser of:

• The income tax you actually paid to Illinois on your IL-source wages, or
• The Missouri tax attributable to that same income

Illinois charges a flat 4.95%. Missouri uses graduated rates with a top rate of 4.7% for 2025 on taxable income over $9,191. Because the Illinois rate exceeds Missouri's top rate, the Illinois tax on your wages will be larger than the Missouri tax on the same dollars. The credit covers your entire Missouri state liability on those wages, and your total state income tax equals the Illinois amount.

If you have Missouri-source income not taxed by Illinois, such as rental income from Missouri property, that income is taxed only by Missouri and does not factor into the credit calculation.

Employer Withholding

How Should My Illinois Employer Handle Withholding?

Your Illinois employer withholds Illinois income tax at the flat 4.95% rate. This is required for all employees performing services in Illinois, regardless of where they live. The employer does not withhold Missouri state tax.

Because only Illinois tax is withheld, your Missouri return may show either a balance due or a refund at the state level. Since Missouri's top rate (4.7%) is lower than Illinois' rate (4.95%), the MO-CR credit typically zeroes out your Missouri state tax on those wages. If the Illinois job is your only income, you may owe nothing to Missouri at the state level after the credit.

If your only income is from an Illinois employer, you may owe nothing to Missouri at the state level after the credit, or you may receive a small Missouri refund if your effective Missouri rate is lower than 4.95%.

Confirm that your employer is registered to withhold Illinois income tax and that your payroll records show your Missouri home address correctly. Check your first pay stub of the year to verify that Illinois withholding appears on the state tax line. Provide a current IL-W-4 to your employer if adjustments are needed.

Local Taxes

Do I Owe St. Louis or Kansas City Earnings Tax on My Illinois Wages?

If you live within St. Louis City limits (not St. Louis County), you owe the 1% St. Louis earnings tax on all your earnings, including wages from an Illinois employer. The city taxes residents on total earnings regardless of where the work is performed. File Form E-1 with the St. Louis Collector of Revenue.

The same rule applies to Kansas City. Residents of Kansas City owe the 1% earnings tax on all earnings, even if every workday is spent in Illinois. File Form RD-109 with the Kansas City Finance Department.

These local earnings taxes are separate from the Missouri state income tax. The MO-CR credit does not offset city earnings tax. On $70,000 in wages, the additional cost is $700 per year.

Your only local tax exposure is through Missouri city earnings taxes at your place of residence. If you live in St. Louis County or any other Missouri municipality without an earnings tax, this section does not apply to you.

Worked Example: Missouri Resident Earning $70,000 in Illinois

Single filer, all wages from Illinois employer, 2025 rates applied to gross wages before deductions

Remote Work

What If I Work from Home in Missouri for an Illinois Employer?

Neither Illinois nor Missouri applies a convenience of the employer rule. Illinois treats compensation as paid in Illinois when the service is localized there, for example because all of it is performed in Illinois. If the work is not localized in any state, Illinois counts working days, but only once the employee performs significant service in Illinois on more than 30 working days. Illinois' own example is a Missouri resident with 35 of 250 working days in Illinois, so 14 percent of her wages is Illinois income. Days you work from your Missouri home are Missouri-source income, not Illinois-source income.

If you split your workweek between both states, allocate your wages based on the number of days worked in each location. Report only the Illinois portion on your IL-1040 Schedule NR. The Missouri portion is taxed only by Missouri, with no Illinois credit needed on those dollars.

Tracking workdays by state can reduce your total tax bill. With Illinois at 4.95% and Missouri's top rate at 4.7%, each day shifted from Illinois to Missouri lowers the effective rate on that day's wages by approximately 0.25 percentage points. For a $70,000 salary, 50 working days are about $14,000 of wages, and moving them from Illinois to Missouri saves roughly $35 a year at the 0.25-point rate difference, if those days are allocable to Missouri at all.

Keep a daily log or calendar showing where you worked, as both states may request documentation during a review. Employer records, VPN logs, and badge-in data can support your allocation if either state questions it.

Mid-Year Move

What If I Moved Between Illinois and Missouri During the Year?

If you changed your permanent residence between Illinois and Missouri during the year, file as a part-year resident in each state. In Illinois, use Form IL-1040 with Schedule NR to report income during your nonresident and part-year resident periods. In Missouri, a part-year resident is treated as a nonresident but may figure the tax as a resident for the whole year. You can use Form MO-NRI for the Missouri income percentage, or elect a resident credit on Form MO-CR for tax paid to Illinois.

During the months you lived in Missouri and worked in Illinois, the credit mechanism described above applies. During any months you lived in Illinois, the state taxes you as a resident on all income, and Missouri taxes only your Missouri-source income for that period.

Document your exact move date. Utility activation records, lease or mortgage dates, and driver's license changes serve as evidence. Both states require you to identify the date your residency changed, and each state's claim to your income depends on which days you were a resident.

Withholding Errors

What If My Employer Withheld for the Wrong State?

If your Illinois employer mistakenly withheld Missouri tax instead of Illinois tax, you will owe Illinois the full amount when you file. Submit Form IL-1040 with Schedule NR and pay the balance due. Claim the incorrectly withheld Missouri amount as a payment on your MO-1040, and Missouri will refund the overpayment.

A more common problem is an employer withholding no state tax at all, usually caused by a payroll configuration error when an out-of-state employee is added. If nothing was withheld, you owe Illinois when you file and may face underpayment penalties. Set up estimated payments for future quarters to avoid repeating the shortfall.

Another scenario arises when your employer uses a third-party payroll provider that defaults to your home state. If Missouri tax is withheld instead of Illinois tax, catch this early by reviewing your first pay stub of the year.

To prevent ongoing issues, confirm that your employer has your Missouri home address on record and is withholding Illinois income tax at 4.95%. Provide a new IL-W-4 if needed. Check your first pay stub of the year to verify that Illinois withholding appears on the state tax line.