Illinois Schedule NR is the Nonresident and Part-Year Resident Computation of Illinois Tax that any person who lived in Illinois for only part of 2025 — or who never lived in Illinois but earned income from Illinois sources — must attach to Form IL-1040 when filing with the Illinois Department of Revenue. The form splits a filer’s income into the portion taxed by Illinois (Column B) and the portion that is not (Column A), so the state collects tax only on the slice it has legal authority to tax under 35 ILCS 5/301–304.
The 2025 revision of Schedule NR (filed in 2026) is the version covered here, and according to the Illinois Department of Revenue’s FY 2025 Annual Report, more than 600,000 nonresident and part-year IL-1040 returns are processed each year, with rejection rates on Schedule NR running higher than on resident returns because of misallocated wages and missed residency dates.
Here is what this guide walks you through:
- 🧾 The exact line-by-line meaning of every box on the 2025 Schedule NR
- 🗺️ How to split wages, interest, dividends, and business income between Illinois and elsewhere
- 👨👩👧 Three full named-person scenarios from move-out to remote worker to rental owner
- 🚫 The ten most common Schedule NR mistakes and what each one costs you
- 📬 Every filing channel — MyTax Illinois, e-file, and paper — with proof-of-filing steps
What Schedule NR Is and Who Must File It
Schedule NR is the Illinois worksheet that allocates a filer’s federal adjusted gross income between the part Illinois may tax and the part it may not. It is not a standalone return — it must be attached to Form IL-1040, and the tax it calculates flows to Line 12 of that return through the official Schedule NR instructions. Without Schedule NR, the Department of Revenue defaults to taxing 100% of federal AGI as if the filer were a full-year Illinois resident, which is almost always the wrong outcome for a nonresident.
You must file Schedule NR if any one of the following is true for tax year 2025: you were an Illinois resident for only part of 2025 (you moved into or out of Illinois during the year); you were a resident of another state all year but earned Illinois-source income such as wages, business profits, rental income, gambling winnings, or sale of Illinois real estate; or you were a resident of Iowa, Kentucky, Michigan, or Wisconsin who had Illinois withholding taken from wages by mistake and now needs a refund under the reciprocal agreement at 86 Ill. Adm. Code 100.7010.
Full-year Illinois residents do not file Schedule NR — they file only Form IL-1040. Active-duty military whose home of record is Illinois are treated as full-year residents even if stationed elsewhere, under the rules in Publication 102, and a civilian spouse who qualifies under the Military Spouses Residency Relief Act (MSRRA) uses Schedule NR to exclude wages earned in Illinois while keeping a home-state domicile.
The form is required by 35 ILCS 5/502 and enforced by the Illinois Department of Revenue under audit authority granted by 35 ILCS 5/904. The penalty for filing IL-1040 without Schedule NR when one is required is a notice of deficiency that re-computes tax on 100% of AGI plus interest from April 15.
Before You Start: Documents and Information You Need
Gathering paperwork before you open Schedule NR will save hours of back-and-forth with the MyTax Illinois portal and prevent the most common math errors. Schedule NR is unusually paperwork-heavy because every Column B entry has to be traceable to a source document the Department of Revenue can match.
The minimum pre-filing checklist for Schedule NR is below.
- Completed federal Form 1040 for 2025. Schedule NR pulls almost every Column A figure straight from the federal return — if your 1040 isn’t done, your Schedule NR can’t be done. A missing federal return triggers a mismatch letter from the IDOR identity-verification unit.
- All W-2 forms showing Illinois wages and Illinois withholding. Box 15 must list “IL” and Box 16 must show the Illinois-allocated wages. Without W-2s, IDOR cannot verify Column B wage entries and will hold any refund.
- All 1099 forms (1099-NEC, 1099-MISC, 1099-INT, 1099-DIV, 1099-R, 1099-G). Each one tells you where the income was sourced and whether Illinois tax was withheld.
- Exact move-in and move-out dates if part-year. The Department uses these dates to prorate the exemption allowance on Line 50, and the wrong date can cost you up to $87 in lost exemption.
- Lease, deed, voter-registration date, or driver’s-license issue date to prove residency change. IDOR can request these under 86 Ill. Adm. Code 100.3020.
- K-1 schedules from any partnership, S-corp, or trust that did business in Illinois. The K-1 will show the Illinois-apportioned share on a state K-1-P or K-1-T.
- Records of Illinois rental property income and expenses, including the Schedule E from the federal return.
- Other-state tax returns if you need to claim the credit for tax paid to another state on Schedule CR as a part-year resident.
- A copy of last year’s IL-1040 and Schedule NR, useful for carryover items and to confirm your prior residency status.
- Form IL-W-5-NR if you are a resident of IA, KY, MI, or WI who should have been exempt from Illinois withholding — found in the employer withholding forms section.
Where to Get the Form and How to Access It
The official 2025 Schedule NR PDF is published by the Illinois Department of Revenue at the individual income tax forms page and is also bundled inside every commercial tax-software package approved under the Illinois e-File program. Always download the form directly from the IDOR site rather than from a third-party blog — prior-year versions look almost identical but have different line numbers and will be rejected by the e-file system.
A blank fillable PDF is available for paper filers who prefer to type entries directly into the form using Adobe Acrobat Reader. Handwritten entries are accepted but must be in black or dark blue ink with one digit per box, per the IDOR paper-filing standards. Avoid pencil, red ink, or scribbled corrections — the Department’s optical scanners will kick the form out for manual review, which adds four to six weeks of processing time.
Tax software users will not see “Schedule NR” as a separate menu item in most programs; instead, the software asks residency questions during the Illinois state interview and generates Schedule NR automatically. Free options for taxpayers under the income threshold include the IRS Free File partners that support Illinois state returns. Volunteer help is available through the IRS-sponsored VITA and TCE sites listed for every Illinois county.
If you need a paper form mailed to you, call IDOR Taxpayer Assistance at 1-800-732-8866 and request the 2025 Schedule NR packet. The mailing usually arrives within two weeks. The current revision date — printed in the bottom-left corner of page 1 — is “IL-1040 Schedule NR (R-12/25)”; if your copy shows a different revision date, it is out of date and will be rejected.
Step-by-Step: How to Fill Out Illinois Schedule NR Line by Line
Schedule NR has five Steps printed on the form itself. Work through them in order — skipping ahead causes the totals at the bottom of each page to fall out of sync.
Step 1, Line 1 — Were You a Resident of Illinois for All of 2025?
What it asks: A simple yes/no on whether you lived in Illinois every single day of 2025.
How to answer: Check the “No” box. If you check “Yes,” you are not allowed to file Schedule NR at all — IDOR will reject the return because Schedule NR is for nonresidents and part-year residents only.
Example: Carlos Mendoza, who moved from Chicago to Indianapolis on June 30, 2025, checks “No” because he was an Illinois resident only from January 1 through June 30.
Nuance: A short business trip out of Illinois does not make you a part-year resident. Domicile, not physical presence, controls — see 86 Ill. Adm. Code 100.3020.
Common mistake and consequence: Checking “Yes” by accident causes IDOR’s system to disallow every Column A entry, treating all federal AGI as Illinois-taxable. The fix is filing an amended IL-1040-X, which delays any refund by twelve to sixteen weeks.
Misconception: Many filers think owning a vacation home in Wisconsin makes them a Wisconsin resident — it does not, unless they also change voter registration, driver’s license, and physical residence.
Step 1, Line 2 — Residency Information for You and Your Spouse
What it asks: Your state of residence, the dates you were an Illinois resident, and the same information for your spouse if filing jointly.
How to answer: Write the two-letter postal code of your home state in the “State” column. Enter the from and to dates of Illinois residency in MM/DD/YYYY format. Nonresidents who never lived in Illinois leave the date fields blank.
Example: Aisha Patel, a Wisconsin resident all year, writes “WI” and leaves the date fields blank because she never lived in Illinois.
Nuance: If you and your spouse have different residency periods, list each separately on Lines 2a and 2b. A “mixed-residency” couple may file jointly for federal purposes but should consider filing separately for Illinois — see the IL-1040 instructions.
Common mistake and consequence: Listing the date you sold your Illinois house instead of the date you actually established a new domicile. Using the wrong date shortens your Illinois residency by weeks and can cause exemption proration errors that add $20–$87 to your tax.
Misconception: People think domicile changes the moment they sign a new lease. Domicile actually changes the day you physically arrive in the new state with intent to remain — courts have ruled on this in Hatcher v. Department of Revenue.
Step 2, Lines 5 Through 19 — Income in Columns A and B
What it asks: Each federal income type from wages to other income, split between Column A (federal amount) and Column B (Illinois portion).
How to answer: Copy Column A directly from the federal 1040 line shown to the left of each Schedule NR line. For Column B, enter only the portion sourced to Illinois under the sourcing rules in 35 ILCS 5/304.
Example: Janet Kowalski had $80,000 of total wages — $50,000 from her Illinois job before she moved and $30,000 from her Indiana job after. She enters $80,000 in Column A, Line 5, and $50,000 in Column B, Line 5.
Nuance: Interest and dividends (Lines 6 and 7) are sourced based on where you lived when you received them, not where the bank is located. A part-year resident must split these by date received.
Common mistake and consequence: Putting the full federal amount in Column B because the income “felt like” Illinois income. This overstates Illinois tax and there is no automatic IDOR correction — you simply overpay.
Misconception: Many remote workers think Illinois cannot tax their wages because their employer is out of state. If the work is physically performed in Illinois, the wages are Illinois-sourced — confirmed in Publication 130.
Step 2, Line 5 — Wages, Salaries, Tips
What it asks: Total wages from federal 1040 Line 1z (Column A) and the portion earned while either (a) an Illinois resident, or (b) physically working in Illinois as a nonresident (Column B).
How to answer: Column A equals federal Line 1z exactly. For Column B, add the Illinois-period wages from W-2 Box 16 if Illinois withholding was reported, plus any work-in-Illinois wages a nonresident earned by physically being in the state.
Example: Marcus Lee lived in Milwaukee all year but spent 40 work-days at a client site in Chicago, earning $24,000 of those wages while physically in Illinois. He enters his full $96,000 in Column A and $24,000 in Column B.
Nuance: If you are a resident of Iowa, Kentucky, Michigan, or Wisconsin, the wage reciprocal agreement means Illinois cannot tax your wages even if you commute daily. Enter $0 in Column B and attach Form IL-W-5-NR to your employer for future years.
Common mistake and consequence: Reciprocal-state residents who copy W-2 Box 16 into Column B because their employer mistakenly withheld Illinois tax. This creates an overstated Illinois tax and forfeits the refund unless you zero out Column B.
Misconception: Filers think “telework days” count as Illinois days if the employer is in Illinois. They do not — only physical presence in Illinois creates Illinois-source wages.
Step 2, Line 6 — Taxable Interest
What it asks: Interest from federal 1040 Line 2b in Column A and the Illinois-period portion in Column B.
How to answer: Take the total from the federal return for Column A. For Column B, multiply total interest by the fraction of the year you were an Illinois resident, unless you can identify specific interest payments by date.
Example: Janet earned $1,200 of bank interest evenly through the year. Because she was an Illinois resident for 181 days (Jan 1 – June 30), she enters $1,200 in Column A and $595 ($1,200 × 181/365) in Column B.
Nuance: Nonresidents enter $0 in Column B for interest because Illinois does not tax intangible income of nonresidents.
Common mistake and consequence: Nonresidents reporting interest from an Illinois bank in Column B. Illinois does not source intangible income to the bank’s location, so this overstates tax.
Misconception: People believe a 1099-INT from a Chicago bank automatically means Illinois interest. It does not — the location of the issuer is irrelevant for nonresidents.
Step 2, Line 7 — Ordinary Dividends
What it asks: Ordinary dividends from federal 1040 Line 3b (Column A) and the Illinois-period portion (Column B).
How to answer: Mirror the federal figure in Column A. For Column B, part-year residents prorate by residency days; nonresidents enter $0.
Example: Carlos received $4,000 of dividends spread evenly. As a part-year resident for 181 days, he enters $4,000 in Column A and $1,984 in Column B.
Nuance: Dividends from a closely held S-corp doing business in Illinois may be re-sourced — see the Schedule K-1-P instructions.
Common mistake and consequence: Allocating dividends to Illinois based on the company’s headquarters. Illinois sources intangible income by residency, not by issuer, leading to overstated Column B.
Misconception: Filers assume “qualified” dividends are sourced differently than ordinary. They are not — the qualified status only affects federal rate.
Step 2, Line 11 — Business Income or Loss
What it asks: Self-employment net income from federal Schedule C in Column A, and the portion sourced to Illinois in Column B.
How to answer: Column A equals federal Line 3 of Schedule 1. For Column B, apply the single-sales-factor apportionment rule in 35 ILCS 5/304(a)(3) — multiply business income by (Illinois sales ÷ total sales).
Example: Aisha runs a consulting business with $120,000 of revenue, $30,000 of which came from Illinois clients. Her net profit was $60,000. She enters $60,000 in Column A and $15,000 ($60,000 × 30,000/120,000) in Column B.
Nuance: A nonresident sole proprietor with no Illinois customers enters $0 in Column B, even if she occasionally travels to Illinois.
Common mistake and consequence: Using a three-factor apportionment formula (property, payroll, sales). Illinois moved to single-sales-factor years ago, so the old method overstates or understates tax.
Misconception: Filers think any Illinois travel creates Illinois business income. Only Illinois sales count for sourcing service income.
Step 2, Line 13 — Capital Gain or Loss
What it asks: Net capital gain from federal 1040 Line 7 (Column A) and the Illinois portion (Column B).
How to answer: Column A equals the federal figure. For Column B, part-year residents prorate by residency days for stock and intangible gains; all filers (including nonresidents) include 100% of gain from the sale of Illinois real estate.
Example: Marcus, a Wisconsin resident, sold a rental house in Aurora, Illinois for a $40,000 gain. He enters $40,000 in both Column A and Column B because Illinois real estate is always Illinois-source.
Nuance: Capital losses follow the same sourcing rules and can offset Illinois-source gains.
Common mistake and consequence: Nonresidents leaving Column B blank for an Illinois real-estate sale. IDOR cross-matches with the Real Estate Transfer Declaration (PTAX-203) and issues a deficiency notice plus penalty.
Misconception: Filers believe selling stock in an Illinois-based company creates Illinois-source gain. It does not — stock is intangible and is sourced by residency.
Step 2, Line 15 — Rental Real Estate, Royalties, Partnerships, S Corps
What it asks: Net income from federal Schedule E (Column A) and the Illinois portion (Column B).
How to answer: Column A mirrors the federal Schedule E total. Column B includes 100% of net income from Illinois real estate plus the Illinois share shown on any Illinois Schedule K-1-P or K-1-T.
Example: Janet has a duplex in Springfield with $8,000 of net rental income and a partnership K-1 showing $5,000 of Illinois-apportioned income. She enters the federal total in Column A and $13,000 in Column B.
Nuance: Passive-activity losses limited at the federal level are also limited for Illinois — do not “free up” suspended losses on Schedule NR.
Common mistake and consequence: Reporting gross rents rather than net in Column B. This overstates Illinois income and tax.
Misconception: Filers think depreciation is recalculated for Illinois. It is not — Illinois follows federal depreciation for individual rental property.
Step 2, Line 19 — Other Income
What it asks: Catch-all income from federal Schedule 1, Line 9 (Column A), and the Illinois portion (Column B).
How to answer: Column A equals the federal figure. For Column B, include Illinois-source items such as Illinois gambling winnings, prizes from Illinois lotteries, and jury-duty pay received in Illinois.
Example: Carlos won $3,000 at a Joliet casino on a single trip. Even as a Wisconsin resident he enters $3,000 in Column B because Illinois sources gambling winnings to the state where the wager is placed.
Nuance: Illinois lottery winnings of $1,000 or more are reported to IDOR on Form W-2G and are always Illinois-source, even for foreign nationals — see Publication 121.
Common mistake and consequence: Forgetting to report Illinois gambling winnings. IDOR cross-matches W-2G filings and will assess tax plus a 20% accuracy penalty.
Misconception: Filers think gambling losses can offset Illinois winnings on Schedule NR. They cannot — Illinois does not allow a gambling-loss deduction for individuals.
Step 3, Line 32 — Illinois Base Income
What it asks: The sum of Column B income after federal adjustments and Illinois additions/subtractions.
How to answer: Add Column B Lines 5–19, then apply Illinois additions from Schedule M (Line 21) and subtractions (Line 31). The result is the Illinois base income that drives your tax.
Example: Aisha’s Column B sum is $40,000, with $500 of additions and $1,200 of subtractions, giving Illinois base income of $39,300.
Nuance: Illinois additions include federally tax-exempt interest from non-Illinois municipal bonds, per the Schedule M instructions.
Common mistake and consequence: Skipping Schedule M additions. This understates Illinois base income, and an IDOR audit can recover the tax plus interest at the statutory rate.
Misconception: Filers think Illinois subtractions wipe out retirement income only for residents. Part-year residents can still subtract qualifying retirement income received during their Illinois period.
Step 4, Line 46 — Illinois Share Decimal
What it asks: The decimal share of total base income that is Illinois-source — Line 32 divided by Line 45.
How to answer: Divide Illinois base income by total base income and round to six decimal places. Never enter a number greater than 1.000000.
Example: Janet’s Illinois base income is $50,000 and her total base income is $80,000. She enters 0.625000 on Line 46.
Nuance: If Line 45 is zero or negative, enter 1.000000 so the form does not divide by zero.
Common mistake and consequence: Rounding to two decimals. Illinois software multiplies through to the dollar, so a too-rough decimal shifts tax by $5–$50 and triggers a math-error notice.
Misconception: Filers think the decimal applies to tax. It actually applies to the exemption allowance that follows, not directly to tax.
Step 4, Line 50 — Prorated Exemption Allowance
What it asks: Your Illinois exemption allowance, prorated by the Line 46 decimal.
How to answer: Take the full-year exemption from IL-1040 Line 10 and multiply by the Line 46 decimal. For 2025 the basic exemption is $2,850 per person, confirmed in the IL-1040 instructions.
Example: Janet’s full exemption is $2,850. She multiplies $2,850 × 0.625000 and enters $1,781 on Line 50.
Nuance: Higher-income filers may have a $0 exemption because Illinois phases out the exemption above $250,000 single / $500,000 joint AGI.
Common mistake and consequence: Using the full $2,850 instead of the prorated amount. The form’s Line 51 net taxable income then drops too low, and IDOR re-computes and bills the difference.
Misconception: Filers think the prorated exemption is unfair. It actually mirrors how the state taxes a slice of income, so the exemption matches that slice.
Step 5, Line 52 — Illinois Tax
What it asks: Net Illinois income tax owed at the flat rate.
How to answer: Multiply Line 51 (Illinois net income) by 4.95%, the flat rate set by 35 ILCS 5/201(b)(14). Round to the nearest whole dollar and transfer this number to IL-1040 Line 12.
Example: Janet’s Line 51 is $48,219. She multiplies $48,219 × 0.0495 = $2,387 and writes $2,387 on Line 52.
Nuance: If the result is negative or zero, enter 0 — Illinois does not have a negative income tax.
Common mistake and consequence: Using the prior year’s 3.75% rate. The 4.95% rate has been in effect since 2017; using the old rate produces a math-error notice and underpayment penalty.
Misconception: Filers think Schedule NR uses a different rate than residents. The rate is the same — only the base differs.
Three Filled-Out Examples Using Real Scenarios
Each scenario below follows one named filer through Schedule NR end to end. All numbers are illustrative and round to the dollar.
Scenario 1 — Carlos Mendoza, Part-Year Resident Who Moved Out
Carlos lived in Chicago from January 1 through June 30, 2025, then moved to Indianapolis for a new job on July 1. His total federal AGI was $90,000.
| Form Section | What Carlos Enters |
|---|---|
| Step 1, Line 1 (Full-year IL?) | No |
| Step 1, Line 2 (State & dates) | IL — 01/01/2025 to 06/30/2025 |
| Step 2, Line 5 Col A / Col B (Wages) | $80,000 / $45,000 |
| Step 2, Line 6 Col A / Col B (Interest) | $1,200 / $595 |
| Step 2, Line 7 Col A / Col B (Dividends) | $4,000 / $1,984 |
| Step 2, Line 19 Col A / Col B (Other) | $0 / $0 |
| Step 3, Line 32 (IL base income) | $47,579 |
| Step 4, Line 46 (Decimal) | 0.528656 |
| Step 4, Line 50 (Exemption) | $1,507 |
| Step 5, Line 52 (IL tax) | $2,281 |
Scenario 2 — Aisha Patel, Nonresident Remote Worker With Illinois Days
Aisha lived in Milwaukee all year and works as an independent consultant. She spent 40 days physically working at a client office in Chicago, earning $24,000 of $96,000 total self-employment income.
| Form Section | What Aisha Enters |
|---|---|
| Step 1, Line 1 (Full-year IL?) | No |
| Step 1, Line 2 (State & dates) | WI — no IL dates |
| Step 2, Line 5 Col A / Col B (Wages) | $0 / $0 |
| Step 2, Line 6 Col A / Col B (Interest) | $800 / $0 |
| Step 2, Line 11 Col A / Col B (Business) | $60,000 / $15,000 |
| Step 2, Line 13 Col A / Col B (Cap gain) | $2,500 / $0 |
| Step 3, Line 32 (IL base income) | $15,000 |
| Step 4, Line 46 (Decimal) | 0.238095 |
| Step 4, Line 50 (Exemption) | $679 |
| Step 5, Line 52 (IL tax) | $709 |
Scenario 3 — Marcus Lee, Nonresident With Illinois Rental Property
Marcus lives in St. Louis but owns a rental duplex in Aurora, Illinois. In 2025 the duplex generated $12,000 of net rental income, and he sold a second Illinois rental for a $40,000 gain.
| Form Section | What Marcus Enters |
|---|---|
| Step 1, Line 1 (Full-year IL?) | No |
| Step 1, Line 2 (State & dates) | MO — no IL dates |
| Step 2, Line 5 Col A / Col B (Wages) | $110,000 / $0 |
| Step 2, Line 13 Col A / Col B (Cap gain) | $40,000 / $40,000 |
| Step 2, Line 15 Col A / Col B (Rental) | $12,000 / $12,000 |
| Step 2, Line 19 Col A / Col B (Other) | $0 / $0 |
| Step 3, Line 32 (IL base income) | $52,000 |
| Step 4, Line 46 (Decimal) | 0.317073 |
| Step 4, Line 50 (Exemption) | $904 |
| Step 5, Line 52 (IL tax) | $2,529 |
How to File the Completed Form
Illinois accepts Schedule NR through three channels, each with its own steps, processing times, and proof-of-filing rules. There is no filing fee for IL-1040 or Schedule NR on any channel.
Online through MyTax Illinois. Create or log in to your account at mytax.illinois.gov, select File a 2025 IL-1040, and the system walks you through Schedule NR as part of the IL-1040 interview. Payment can be made by direct debit from a checking or savings account at no cost, or by credit card through Official Payments with a 2.25% convenience fee. Processing takes two to three weeks for refunds; your proof of filing is the confirmation number that appears on screen and is emailed to you.
E-file through commercial tax software or VITA. Most paid software (TurboTax, H&R Block, TaxAct, FreeTaxUSA) supports Schedule NR, as do most IRS Free File partners for filers under the income threshold. Payment can be scheduled by direct debit for any date up to April 15, 2026; processing time is one to two weeks for refunds. Keep the software’s electronic acceptance acknowledgment as proof of filing.
Paper by mail. Print the completed Schedule NR and IL-1040, sign in blue or black ink, and mail to one of two addresses depending on whether you owe or expect a refund. Refund returns go to Illinois Department of Revenue, P.O. Box 1040, Galesburg, IL 61402-1040; balance-due returns with payment go to Illinois Department of Revenue, P.O. Box 19027, Springfield, IL 62794-9027, per the mailing-address page. Pay by check made out to “Illinois Department of Revenue” with Form IL-1040-V. Processing time is eight to twelve weeks, and your proof of filing is a USPS Certified Mail receipt — keep it for at least three years.
In person. Illinois no longer accepts in-person paper drop-off at most regional offices, but the Springfield Willard Ice Building accepts hand-delivered returns Monday–Friday during business hours. Bring two copies so the clerk can date-stamp one for your records.
What Happens After You File
Within 24 to 72 hours of e-filing, IDOR sends an electronic acknowledgment to your tax software confirming the return was accepted or flagged for review. Paper returns get no acknowledgment until processing completes, but you can check status anytime at the Where’s My Refund lookup tool using your Social Security number and refund amount.
If your Schedule NR raises an internal flag — for example, a Column B wage figure that does not match the W-2s the employer transmitted to IDOR — you will get a Letter of Inquiry asking for documentation within 30 days. Responding on time keeps your refund moving; failing to respond turns the inquiry into a Notice of Deficiency that assesses tax on 100% of your income and starts penalty and interest accrual.
Refunds are issued by direct deposit within two to three weeks of acceptance for e-file returns, or by paper check within four to six weeks if you did not request direct deposit. Balance-due payments are debited on the date you scheduled, or applied to your account within five business days of receipt for paper checks. IDOR keeps Schedule NR on file for the statute-of-limitations period of three years and six months under 35 ILCS 735/3-6, after which an audit generally cannot be opened.
Mistakes to Avoid When Filling Out the Form
- Checking “Yes” on Step 1, Line 1. This disqualifies you from using Schedule NR and forces IDOR to tax 100% of your income.
- Using wrong residency dates. Even a one-week error throws off the Line 46 decimal and changes the exemption allowance.
- Copying federal AGI into Column B. This is the single most common error and overstates Illinois tax by hundreds of dollars.
- Forgetting to include Illinois gambling winnings. W-2G matching at IDOR catches this every time and adds a 20% accuracy penalty.
- Allocating intangible income to a nonresident. Interest, dividends, and stock gains are not Illinois-source for nonresidents, period.
- Reciprocal-state residents reporting wages in Column B. Iowa, Kentucky, Michigan, and Wisconsin residents owe $0 Illinois tax on wages.
- Skipping Schedule M additions or subtractions. Out-of-state municipal interest must be added back; missing it can trigger an audit.
- Using the prior-year 3.75% rate. The 4.95% rate has applied since 2017 and the math is checked automatically.
- Rounding Line 46 to two decimals. Illinois requires six decimals and recalculates exemption to the dollar.
- Forgetting to attach W-2s and the federal return. Paper filers who skip attachments get a 30-day inquiry letter that delays refunds.
- Mailing to the wrong P.O. Box. Refund and balance-due returns go to different addresses; the wrong box adds weeks of delay.
- Not signing the IL-1040. Schedule NR cannot stand alone — an unsigned IL-1040 invalidates the entire filing.
Do’s and Don’ts
Do:
- Do finish your federal Form 1040 first because every Column A entry depends on it.
- Do keep dated proof of residency change — lease, deed, voter card — for at least four years.
- Do round all figures to whole dollars, the format IDOR’s scanner expects.
- Do use the 2025 Schedule NR (R-12/25) rather than a prior version.
- Do double-check the Line 46 decimal to six places before signing.
- Do attach Form IL-W-5-NR to your employer if you live in IA, KY, MI, or WI to stop Illinois withholding next year.
- Do keep certified-mail receipts or e-file acknowledgments for at least three years.
Don’t:
- Don’t report wages from a reciprocal state in Column B, even if your employer mistakenly withheld Illinois tax.
- Don’t allocate interest or dividends to Illinois as a nonresident — these are not Illinois-source.
- Don’t skip Schedule M when you have out-of-state municipal bond interest.
- Don’t estimate residency dates — pull them from documents you can produce on audit.
- Don’t mail to an old IDOR P.O. Box; addresses changed in 2022.
- Don’t use pencil or red ink on a paper form.
- Don’t forget to sign IL-1040 — an unsigned return is treated as not filed.
Pros and Cons of Filing on Your Own vs. With Help
| Doing It Yourself | Hiring a CPA or EA |
|---|---|
| Free or low cost (Free File, MyTax Illinois) | Fees often range $250–$700 for multi-state returns |
| You learn the form and the underlying rules | A pro carries the audit defense and malpractice insurance |
| Total control over timing and submission | Multi-state apportionment is handled correctly by experience |
| Software walks you through residency questions | Reciprocal-agreement nuances are second nature to a pro |
| Direct deposit refund in two to three weeks | A pro can file IL-1040-X if a prior-year error is found |
Pros of filing on your own:
- Free if you use MyTax Illinois or IRS Free File.
- You learn the system, which helps every future year.
- Faster turnaround for simple part-year situations.
- Full transparency into how the Line 46 decimal is calculated.
- No scheduling around someone else’s calendar.
Cons of filing on your own:
- Multi-state apportionment for self-employment is easy to get wrong.
- Reciprocal-state nuances cost real refund dollars if missed.
- No audit defense if IDOR sends an inquiry letter.
- K-1-P and K-1-T allocations require careful reading of the partnership return.
- Errors can compound across IL-1040, Schedule M, Schedule CR, and Schedule NR.
FAQs
Do I file Schedule NR if I lived in Illinois the whole year but worked in Indiana?
No. Full-year Illinois residents file only IL-1040 and use Schedule CR to claim a credit for tax paid to Indiana. Schedule NR is only for nonresidents and part-year residents.
Do reciprocal-state residents (IA, KY, MI, WI) file Schedule NR?
Yes. File Schedule NR with $0 in Column B for wages to get back any Illinois withholding. Give your employer Form IL-W-5-NR to stop Illinois withholding next year.
Do I write my move-out date or my new-state move-in date in Step 1, Line 2?
Yes — use the date you physically left Illinois with intent to remain elsewhere. That date ends your Illinois residency for Line 2 even if your old lease ran longer.
Do I include my non-Illinois bank interest in Column B as a part-year resident?
Yes — but only the portion earned while you were an Illinois resident. Prorate by residency days unless you can identify exact payment dates from your 1099-INT.
Do nonresidents include Illinois lottery winnings on Schedule NR?
Yes. Illinois sources gambling winnings to the place the wager is made, so Joliet casino or Illinois Lottery winnings go in Column B even for out-of-state filers.
Do I have to attach my federal Form 1040?
Yes. Paper filers must attach a complete copy of the federal return; e-filers transmit it automatically with the state return.
Do I prorate my exemption allowance on Line 50?
Yes. Multiply the full Illinois exemption by the Line 46 decimal so the exemption matches your Illinois share of base income.
Do I owe Illinois tax on stock I sold from an Illinois-based company?
No — not as a nonresident. Stock gains are intangible and sourced to your state of residence, not the company’s state.
Do remote workers living outside Illinois owe Illinois tax on wages from an Illinois employer?
No — unless they physically work in Illinois. Only wages earned while present in Illinois are Illinois-source.
Do I need to file Schedule NR if my only Illinois income was a $200 jury-duty check?
Yes, technically — but if your Column B base income is below your prorated exemption, your tax is $0. File to be safe and to recover any withholding.
Do I file separately from my spouse if we have different residency periods?
No, you may file jointly, but separate Illinois filing often produces a lower combined tax for mixed-residency couples — run the math both ways.
Do I use the 4.95% rate or the prior 3.75% rate on Line 52?
Yes — use 4.95%. The 3.75% rate ended in 2017 under 35 ILCS 5/201(b)(14).
Do military spouses use Schedule NR under MSRRA?
Yes. A civilian spouse covered by the Military Spouses Residency Relief Act files Schedule NR to exclude Illinois wages while keeping home-state domicile.
Do I need to file an amended Schedule NR if I find an error?
Yes. File IL-1040-X with a corrected Schedule NR attached within three years of the original due date.
Related reading
- How to Fill Out Illinois Withholding Form IL-W-4 + FAQs
- How to Fill Out Illinois Form IL-1040-X (w/Examples) + FAQs
- How to Fill Out Illinois Form IL-1041 (w/Examples) + FAQs
- How to Fill Out Illinois Form IL-941 (w/Examples) + FAQs
- How to Fill Out Illinois Form Schedule ICR (w/Examples) + FAQs
- How to Fill Out Illinois Form Schedule M (w/Examples) + FAQs
- How to Fill Out Illinois Form IL-1120-ST (w/Examples) + FAQs