Illinois Form IL-1040 Schedule NR – Nonresident and Part-Year Resident Tax Calculation (2026)
Last reviewed: 2025-11-03
Use the Illinois Tax Form Calculator Form IL-1040 Schedule NR: Illinois Nonresident and Part-Year Resident as a stand alone tax form calculator to quickly calculate specific amounts for your 2026 Illinois state tax return. Alternatively, you can use one of our Combined Federal and State Tax Estimators to quickly calculate your salary, tax, and take-home pay.
Form IL-1040 Schedule NR determines how much of your total income is taxable in Illinois if you were a nonresident or part-year resident. The form calculates the proportion of income earned within the state and applies the flat rate of 4.95%, ensuring that you pay Illinois tax only on your Illinois-source earnings.
Who Must File Schedule NR
You must file Schedule NR if you lived outside Illinois for part or all of 2026 and earned wages, business income, or other taxable income from Illinois sources. Nonresidents also use Schedule NR to compute their credit for taxes paid to other states via Schedule CR. If you were a full-year resident, do not include this schedule; instead, complete Form IL-1040 alone.
The calculation starts by entering your federal adjusted gross income and any additions from Schedule M. You then determine your Illinois-source income by combining income earned while resident and any nonresident Illinois earnings. The apportionment ratio (Line 9) divides Illinois income by total income to find the portion subject to Illinois tax. This ratio multiplies your total Illinois base tax (Line 10) to determine the exact liability for Illinois sources only.
Schedule NR ensures fairness by exempting income earned while living outside Illinois. It also enables credits for taxes paid to other states when the same income is taxed elsewhere. Remember that the credit cannot exceed the Illinois tax otherwise due on that income.
| Step 1 – Residency Status | ||
| 1 | Enter residency period (dates you lived in Illinois during 2026) | |
| 2 | Check this box if you were a nonresident for the entire year | |
| Step 2 – Income Allocation | ||
| 3 | Federal adjusted gross income from Form IL-1040 Line 1 | |
| 4 | Additions from Illinois Schedule M Line 11 (if filed) | |
| 5 | Total income from all sources (Lines 3 + 4) | |
| 6 | Income earned while a resident of Illinois | |
| 7 | Illinois-source income while nonresident (attach Schedule CR if applicable) | |
| 8 | Total Illinois income (Lines 6 + 7) | |
| 9 | Apportionment ratio (Line 8 ÷ Line 5) | |
| Step 3 – Tax Computation | ||
| 10 | Tax from Form IL-1040 Line 12 (before credits) | |
| 11 | Multiply Line 10 by Line 9 (apportionment ratio) | |
| 12 | Credit for tax paid to other states (Attach Schedule CR) | |
| 13 | Tax after credit (Line 11 − Line 12; not less than zero) | |
| 14 | Recapture taxes or surcharges (if applicable) | |
| 15 | Total Illinois tax due (Line 13 + Line 14) | |
| Step 4 – Payments and Balance | ||
| 16 | Illinois income tax withheld | |
| 17 | Estimated payments or prior-year overpayment credit | |
| 18 | Total payments (Lines 16 + 17) | |
| 19 | If Line 18 > Line 15, overpayment (Line 18 − Line 15) | |
| 20 | If Line 15 > Line 18, balance due (Line 15 − Line 18) | |
Example Scenario
Example: John worked in Chicago from January to June 2026, then moved permanently to Indiana. His total income for the year was $80,000, with $35,000 earned in Illinois. John’s apportionment ratio is $35,000 ÷ $80,000 = 0.4375. The Illinois tax at 4.95 % is applied only to 43.75 % of his total liability, ensuring he pays Illinois tax only on his Illinois earnings.
Common Errors and Tips
- Always include supporting state wage statements (W-2 box 15) and out-of-state returns when claiming credit for taxes paid elsewhere.
- Do not prorate exemptions—exemption phase-outs occur at the state level, not on Schedule NR.
- Ensure Line 11 (apportioned tax) feeds accurately into Form IL-1040 Line 12.
- Attach Schedule M and Schedule CR if you have income adjustments or out-of-state credits.
Last reviewed: 2025-11-03: If you believe this form requires an update, please contact us.
Related Resources
For additional guidance, consult:
- Schedule CR – Credit for Tax Paid to Other States
- Schedule M – Additions and Subtractions
- Form IL-1040 – Individual Income Tax Return
Official references: Schedule NR Instructions (2026) from the Illinois Department of Revenue.
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Frequently Asked Questions
Will IL tax my Roth conversions?
Conversions are taxable federally and typically flow to IL; IL retirement exclusion usually applies to distributions, not conversions—check IL guidance.
How do I amend my Illinois return?
File Form IL-1040-X after your original IL-1040 is processed; include revised schedules (e.g., Schedule ICR/CR/M) and explanations.
Why does Illinois distinguish pre-1969 and post-1969 gains?
Because Illinois enacted its income tax on August 1, 1969, any appreciation before that date occurred before the state had authority to tax income. Form IL-F preserves fairness by taxing only the gain realized since Illinois income tax law took effect. This approach avoids retroactive taxation while ensuring current gains are taxed appropriately.
When should Schedule FD be filed?
File Schedule FD with your annual IL-1040 return for the tax year in which the deferred income became federally taxable.
Why is Schedule M important for accurate Illinois taxes?
Illinois uses Schedule M to ensure fairness in applying its flat 4.95% tax rate. Because Illinois starts from federal AGI, this form ensures only Illinois-approved income is taxed and proper deductions are applied. It’s especially vital for retirees, military personnel, and taxpayers with multistate investments.
Important Notes
All calculations are estimates for guidance only. Always review your return and consider professional advice when submitting official filings.