[leglock]

I was approached with a tax issue of which i did not know the answer, so hopefully someone here does.

A friend lives in illinois has an scorp incorporated in illinois but his business is located in wisconsin. Does his business income and separately stated items flow through as normal to his personal return or does this require special handling or disqualify certain things from flowing thru bc he lives in illinois but the business stuff was earned in wisconsin even though its an illinois corp

I know that when u live in one state and work in another u have to basically pay tax in both states and get a credit so things equal out, but my question specifically is regarding whether there r any issues relative to being able to pass thru business items (presumBly for the stste return)

Thanks for any help if anyone has an opinion

[rzrbkfaith]

leglock, I live at the corner of AR, LA and TX and we encounter this issue frequently. Your friend will need both a federal and a state K-1 from Wisconsin and will have to file both an Illinois and Wisconsin return (assuming the income is substantial enough, i.e. not like $50). The Wisconsin return will have its own limits for depreciation, contributions, etc. unless they have adopted the federal rules (some states have). Any contributions would be Wisconsin contributions and not Illinois contributions, etc. Most states will require that you pay the higher amount of state tax, so if Wisconsin has a lower tax rate, its possible that your friend will owe additional taxes in Illinois due to the Wisconsin income. Arkansas will figure the income tax on the income from a different state and they give you a credit for the other state income taxes, but if Arkansas taxes would have been higher, you have to pay the difference.

AUD - 99
BEC - 97
REG - 91
FAR - 1/8/16

[FARtogo2014]

IL and WI are reciprocal states. ? I worked on a individual ‘s tax return who lived in one and worked int he other( IL and WI). Check the rules for reciprocal states on the dept of revenue for that state.

AUD 81
REG 88
BEC 77
FAR 69 retake SCHEDULED TO TAKE IN Nov 2014

[leglock]

Thank you both

[Author]

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