Legislation aims to end double taxation
State Representative Natalie Manley (D-Joliet) is sponsoring legislation that would prohibit Illinois from double taxing income that is earned in another state when the taxpayer’s home office is based in Illinois.
“Right now Illinois residents are taxed on most income received in other states, rather than just income earned in Illinois,” said Manley. “This wouldn’t be an issue if the other states didn’t also tax those wages, but they do. Our working families are being hit hard enough with the many different taxes that are imposed upon them, and the last thing we should be doing is taxing them twice on the same income.”
Manley introduced House Bill 675, to prevent the double taxation of certain income for Illinois residents. Under current law, if an Illinois resident earns income from another state then that person is required to pay taxes in both states under certain circumstances. The legislation would instead only tax the wages earned in Illinois based on the number of work days the employee is performing services in Illinois. Out-of-state earnings would be excluded from Illinois income taxes.
“We are the only state that implements this double taxation, and it hurts our taxpayers,” Manley said. “Even though this doesn’t apply to a majority of taxpayers, as a CPA I am appalled that the current law is designed to take advantage of the few that are affected. This legislation is designed to rectify the law and allow parity within our tax code and other states. It is a necessary step, and I look forward to working with all stakeholders involved to resolve it.”
