IN has never considered W2G income as reciprocal and as of about five years ago there is no reciprocal agreement of any kind between IL and IN as IL was getting screwed by that arrangement because more IN residents earn money in IL than the other way around. WI has agreed to a give back to IL to keep it's agreement.
···
----- Original Message -----
From: vp_nbi
To: vpFREE_Chicago@yahoogroups.com
Sent: 10/23/2004 5:25:28 PM
Subject: [vpFREE_Chicago] Re: MS Bounceback Debate
--- In vpFREE_Chicago@yahoogroups.com, "Howard Stern"
<howard.w.stern@e...> wrote:
Not only does IN have a state income tax but they withhold that 3.4%
on all W2G level wins. IL taxes income based on the Federal Adjusted
Gross Income. This is common in most states that have state income
taxes. IL lets you credit up to 3% against IL taxes but since your
reporting the AGI that includes income from other states.
I thought adjacent states have reciprocal taxing agreements to avoid
this sillyness. For example, permanent residents of Illinois have any
income derived in an adjacent state directly reported to IL rather
than the state taxing authority where the income was derived. It isn't
at all obvious from the W2Gs that the withheld tax is entirely IN
income tax. If for example IN was to pocket .4% and forward 3% to IL
there would be no need to for a credit against IN income tax when
filing an IL return. This issue is affecting me only now because in
years past the majority of my gambling was done in Nevada (which has
no state income tax) or IL.
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