Illinois Form IL-W-4-NR – Nonresident Employee Withholding Certificate (2026)
Last reviewed: 2025-11-08
Use the Illinois Tax Form Calculator Form IL-W-4-NR: Nonresident Employee Withholding Certificate 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-W-4-NR is used by nonresident employees who earn income from work performed within Illinois. This form instructs the employer how much Illinois income tax to withhold from wages, commissions, or other Illinois-source payments. The tax rate is 4.95% for all employees, including nonresidents. Residents of states with reciprocity agreements—currently Iowa, Kentucky, Michigan, and Wisconsin—are generally exempt from Illinois withholding.
When to File Form IL-W-4-NR
File this form with your Illinois employer if you:
- Live outside Illinois but perform work physically within Illinois.
- Are an out-of-state resident with Illinois-source income (e.g., consultant, remote worker, contractor).
- Qualify for reciprocity and need to claim exemption from Illinois withholding.
How Illinois Nonresident Withholding Works
Illinois taxes income earned within the state regardless of residency. The employer calculates tax based on wages attributable to Illinois and applies the flat 4.95% rate unless an exemption applies. Employees can request additional withholding if they have other Illinois-source income or anticipate underpayment.
- Enter total Illinois-source wages on Line 1.
- Enter allowable nonresident exemptions on Line 2.
- Subtract Line 2 from Line 1 to get taxable Illinois wages (Line 3).
- Multiply Line 3 by 4.95% to calculate the required withholding (Line 4).
- Add any additional voluntary withholding (Line 5) if you wish to cover other tax obligations.
| 1 | Illinois-source wages | |
| 2 | Nonresident exemptions | |
| 3 | Taxable Illinois wages (Line 1 − Line 2) | |
| 4 | Illinois tax (4.95%) × Line 3 | |
| 5 | Additional voluntary withholding | |
| 6 | Total Illinois withholding (Line 4 + Line 5) |
Example
Example: Taylor lives in Indiana but works two days a week in Chicago. Taylor earns $40,000 annually, with $15,000 attributable to Illinois work. The Illinois withholding is $15,000 × 4.95% = $742.50. Because Indiana and Illinois have no reciprocity, Taylor’s employer must withhold Illinois tax on the Illinois portion of income.
Tips for Nonresident Employees
- Keep clear records showing how wages are allocated between states.
- If you live in Iowa, Kentucky, Michigan, or Wisconsin, you may claim exemption due to reciprocity.
- If you have multiple Illinois employers, submit a separate IL-W-4-NR to each.
- File Schedule NR with your Illinois return to report and reconcile nonresident income at year-end.
Employers use Form IL-W-4-NR to ensure compliance with Illinois withholding requirements under 35 ILCS 5/701 and corresponding administrative rules.
Last reviewed: 2025-11-08: If you believe this form requires an update, please contact us.
Related Forms and Resources
- Form IL-W-4 – Employee’s Illinois Withholding Allowance Certificate
- Schedule NR – Nonresident and Part-Year Resident
- Form IL-1040 – Individual Income Tax Return
- Illinois DOR – Form IL-W-4-NR Information
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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.