Illinois Nonresident Income Tax Instruction Booklet

Nonresident Income Tax Instruction Booklet
2023 IL-1040 Schedule NR Instructions
	

Illinois Department of Revenue

	 Schedule NR IL-1040 Instructions	
What is the purpose of Schedule NR?

General Information

Schedule NR, Nonresident and Part-Year Resident Computation
of Illinois Tax, allows part-year or nonresidents of Illinois to determine
the income that is taxed by Illinois during the tax year and to figure
Illinois Income Tax.
Attach: Schedule NR to Form IL-1040, Individual Income Tax Return.

What if I was a nonresident of Illinois for the entire tax year?
If you were a nonresident of Illinois during the entire tax year, 		
you must complete and file Form IL-1040 and Schedule NR if you
●	 earned enough taxable income from Illinois sources to have a 	
tax liability (i.e., your Illinois base income from Schedule NR is
greater than your Illinois exemption allowance on Schedule NR), 	
or
●	 are entitled to a refund of Illinois Income Tax that was withheld 	
from your pay in error.
Note: If you were not a resident of Iowa, Kentucky, Michigan, or
Wisconsin, you must attach a statement from your employer, on
company letterhead, indicating that your wages were not earned in
Illinois and Illinois tax was withheld in error.

What if I was a resident of a reciprocal state for the tax
year, I was a resident of another state living in Illinois
only to accompany my spouse who was stationed in
Illinois for military service, or I was a spouse who elected
to use my service member spouse’s state of residence
for tax purposes pursuant to the Veterans Benefits and
Transition Act of 2018?
If you were an Iowa, Kentucky, Michigan, or Wisconsin resident or
a military spouse, and earned income in Illinois, you are exempt
from paying Illinois Income Tax on income you earned from
salaries, wages, tips, and other employee compensation. You are
exempt because Illinois has a reciprocal agreement with these
states or because military spouse wages are taxable to the state of
residence. You must file Form IL‑W‑5‑NR, Employee’s Statement
of Nonresidence in Illinois, with your employer to be entitled to
exemption from withholding. If you are a resident of a reciprocal
state or a military spouse, you do not have to file Form IL-1040 and
Schedule NR unless you
●	

earned income in Illinois from sources other than wages paid to
you as an employee, or

●	

had Illinois Income Tax withheld from your pay in error.

What if I was a nonresident professional athlete?
All nonresident members of a professional athletic team are 	
subject to Illinois Income Tax on the Illinois portion of their total 	
compensation for services performed as a member of such a team.
For more information, see Publication 130, Who is Required to
Withhold Illinois Income Tax, or refer to “What if I need additional
assistance?” on page 2 of these instructions.

What if I was an Illinois resident for part of the tax year?
If you were a resident of Illinois during part of the tax year, you 		
are considered a part-year resident and must complete and file 	
Form IL-1040 and Schedule NR if you
■	

earned or received income from any source while you were
an Illinois resident,

IL-1040 Schedule NR Instructions (R-12/23)

■	
■	

2023

earned or received income from Illinois sources while you were
not an Illinois resident, or
are entitled to receive a refund of Illinois Income Tax.

As a part-year resident, the rules you use to determine Illinois income
and tax depend on whether or not you were a resident of Illinois
when you received the income.
If you were a resident of Illinois when you received the income, you
will (within certain limitations) be taxed on 100 percent of the income
you received while you were a resident, regardless of the source.
If you were a nonresident of Illinois when you received the income,
you will be taxed only on the income you received from Illinois
sources.
When completing Schedule NR, you must include in Column B
of each line the income you received during the time you were
a resident and the Illinois income you received during the time
you were not a resident. See “Part-Year Resident Step-by-Step
Instructions” for details.
Use the same method of reporting that you use for filing your federal
return. Report your income when you receive it and your deductions
when they are paid. However, if you use the accrual method,
“received” means “earned or received.” Income that you received
through partnerships, S corporations, trusts, or estates is considered
received on the last day of the entity’s tax year.
Note: Temporary absences from Illinois during the tax year do not
qualify you for part-year resident status.

What if I received income from a business or a
farm during the tax year?
If, while you were a nonresident of Illinois, you received
■	

business income earned both inside and outside Illinois, or

■	

farm income earned both inside and outside Illinois,

you must complete the Business or Farm Income Apportionment
Formula (IAF) Worksheet on Page 10. The IAF Worksheet allows you
to figure the Illinois portion of your business or farm income. Be sure
to keep a copy of this worksheet with your income tax records.

What is business income?

Business income is income you earned or received from any
activity that you took part in during the regular course of your trade
or business. It does not include wages or other compensation
you received as an employee. It includes all income (other than
compensation) that may be apportioned by formula among the states
in which you are doing business without violating the Constitution of
the United States. All income (other than compensation) you received
is business income unless it is clearly attributable to only one state
and is earned or received through activities totally unrelated to any
business you are conducting in more than one state. Business
income is net of all deductions attributable to that income.

What if I received income from partnerships,			
S corporations, trusts, or estates?
If you received income from an Illinois partnership or S corporation,
that entity is required to send you an Illinois Schedule
K-1-P, Partner’s or Shareholder’s Share of Income, Deductions,
Credits, and Recapture. Also, the entity is required to send you the
partner’s and shareholder’s instructions for completing Schedule NR.

Printed by authority of the State of Illinois. Electronic only, one copy.

	

Page 1 of 10

General Information
If you received income from an Illinois trust or estate, that entity is
required to send you an Illinois Schedule K-1-T, Beneficiary’s Share
of Income and Deductions. Also the entity is required to send you the
beneficiary’s instructions for completing Schedule NR.
Note: If you are a nonresident and your only income in Illinois is from
one or more partnerships, S corporations, or trusts that made sufficient
pass-through withholding on your behalf to cover your Illinois Income
Tax liability, you are not required to file a Form IL-1040.

What if I need additional assistance or forms?
•	 Visit our website at tax.illinois.gov for assistance, forms or
schedules.

	

•	 Write us at:
		 ILLINOIS DEPARTMENT OF REVENUE
		
PO BOX 19001 			
		
SPRINGFIELD ILLINOIS 62794-9001
•	 Call 1 800 732-8866 or 217 782-3336 (TTY at 1 800 5445304).
•	 Visit a taxpayer assistance office - 8:00 a.m. to 5:00 p.m.
(Springfield office) and 8:30 a.m. to 5:00 p.m. (all other
offices), Monday through Friday.

Nonresident Step-by-Step Instructions
Step 1: Provide the following information
Line 1: Check the “Yes” box if

■	 you were a full-year resident of Illinois during the tax year, or
■	 your filing status is “married filing jointly” and your spouse was a
full-year resident of Illinois during the tax year.
Check the “No” box if
■	 you are not filing a joint return, and you were not a full-year
resident of Illinois during the tax year, or
■	 you are filing a joint return, and neither you nor your spouse was a
full-year resident of Illinois during the tax year.
Note: If you check the “Yes” box on Line 1, you cannot use
Schedule NR. If you file your Illinois return indicating your filing
status as “married filing jointly” and one spouse is a full-year
resident of Illinois, both spouses must use full-year residency status.
However, if you are filing a joint federal return and one spouse is an
Illinois resident while the other is a full-year nonresident, you may
choose to file with Illinois as “married filing separately.” In this case,
do not recompute any items on your federal return. Instead, you
must divide each item of income and deduction shown on your joint
federal return between your separate Illinois returns following the
Allocation Worksheet in the Form IL-1040 Instructions. The spouse
filing as a nonresident must attach a completed Schedule NR.

Lines 2a and 2b: Full-year nonresidents, skip these lines.
Line 3: If you were a resident of Iowa, Kentucky, Michigan, or

Step 3: Figure the Illinois portion of your
federal adjusted gross income
Column A – Federal Total

In Column A of each line, except Line 19, enter the amounts exactly
as reported on the corresponding line of your federal income tax
return.
Note: Line 19, Other income, should not include any net operating
loss (NOL) carryforward to this year that is available to carry forward
to next year. See Form IL-1040, Line 1 instructions.
Note: If you filed a joint federal income tax return and are filing a
separate Illinois return, include in Column A only your share of the
amounts from your joint federal income tax return. Complete the
Allocation Worksheet in the Form IL-1040 Instructions to determine
your share of the amounts from your joint federal return.

Column B – Illinois Portion

Enter the portion of Column A, Federal Total, that is taxed by Illinois.
To determine the taxable amount, you must read and follow the
instructions for each line.
Note: If you received an Illinois Schedule K-1-P or K-1-T, refer to
that form’s instructions to figure the amount to include on each line.

Income

Line 5: Wages, salaries, tips, etc.

Wisconsin, during any part of the tax year, were living in Illinois
only to accompany your military service member spouse who was
stationed in Illinois or if you elected to use your service member
spouse’s state of residence for tax purposes, check the appropriate
box.
Note: If you check the military spouse box, attach the military
service member’s Form W-2 showing military wages.

Line 4: If you claimed residency for tax purposes in 2023 in

any state other than those listed on Line 3, enter the two-letter
abbreviation of the state(s) on the lines provided.

Step 2: Complete Form IL-1040

Complete Lines 1 through 10 of your Form IL-1040 as if you were a
full-year Illinois resident. Follow the Form IL-1040 Instructions.

Page 2 of 10	

		

Enter the amount shown as Illinois wages on the Illinois copy of the
W-2 forms you received while you were a nonresident.
Do not include any Illinois wages you received while
■	 you were a resident of Iowa, Kentucky, Michigan, or Wisconsin.
■	 you were living in Illinois only to accompany your military
service member spouse who was stationed in Illinois.
■	 you were living in Illinois and elected to use your military service
member spouse’s state of residence for tax purposes.
Note: If the Illinois wages as shown on your W-2 are incorrect, you
must attach a letter from your employer, on company letterhead,
stating the the correct amount of Illinois wages and the number of
work days performed in each state. If any of the compensation was
earned in a prior tax year, (i.e. deferred compensation or exercised
stock options), the statement must include a detailed calculation of
how this income has been sourced. We will not accept a letter from
you or your tax preparer.
Note: If any of your wages are for military pay, be sure to complete
Step 4, Line 44 and Schedule M.
	

IL-1040 Schedule NR Instructions (R-12/23)

Nonresident Instructions
Line 6: Taxable interest

Interest income you received, other than business interest income,
is not taxed by Illinois.
Business interest income you received as part of a business
conducted in Illinois is taxed by Illinois. If this income is from a
business conducted
■	 entirely in Illinois, enter the amount from Column A.
■	 both inside and outside Illinois, complete the IAF Worksheet on
Page 10 to figure the Illinois portion of that income, and include
the amount from Line 3 of the worksheet.

Line 7: Ordinary dividends

Dividend income you received, other than business dividend
income, is not taxed by Illinois.
Business dividend income you received as part of a business
conducted in Illinois is taxed by Illinois. If this income was received
from a business conducted
■	 entirely in Illinois, enter the amount from Column A.
■	 both inside and outside Illinois, complete the IAF Worksheet on
Page 10 to figure the Illinois portion of that income, and include
the amount from Line 3 of the worksheet.

Line 8: Taxable refunds, credits, or offsets of state and
local income taxes

Enter the amount of any Illinois Income Tax refund you included in
your taxable income because you claimed this refund as an itemized
deduction on a previous year’s federal return. If you received this
refund from business taxes, include any refund amount to the extent
that the original deduction was allocated to Illinois.

	Line 9: Alimony received

Do not enter an amount on this line. As a nonresident, alimony you
received is not taxed by Illinois.

Line 10: Business income or loss

Business income or loss that you received as part of a business
conducted in Illinois is taxed by Illinois. If your business income or
loss was received from a business conducted
■	 entirely in Illinois, enter the amount from Column A.
■	 both inside and outside Illinois, complete the IAF Worksheet on
Page 10 to figure the Illinois portion of that income, and include
the amount from Line 3 of the worksheet.

Line 11: Capital gain or loss

Enter any capital gains or losses, other than business capital gains
or losses, you received from the sale of real property or tangible
personal property located in Illinois at the time of the sale or
exchange. Nonbusiness capital gains or losses that resulted from
your sale of intangibles are not taxed by Illinois.
Capital gains or losses you received as part of a business
conducted in Illinois are taxed by Illinois. If the business was
conducted
■	 entirely in Illinois, enter the amount from Column A.
■	 both inside and outside Illinois, complete the IAF Worksheet on
Page 10 to figure the Illinois portion of that income, and include
the amount from Line 3 of the worksheet.
Note: You may include any capital loss amounts only to the extent
those loss amounts were included in your federal adjusted gross
income.

Line 12: Other gains or losses

Other gains or losses you received as part of a business conducted
in Illinois are taxed by Illinois. All gains or losses that you included
on federal Form 4797, Sales of Business Property, are classified as
business income.

IL-1040 Schedule NR Instructions (R-12/23)	

If this income or loss was received from a business conducted
■	 entirely in Illinois, enter the amount from Column A.
■	 both inside and outside Illinois, complete the IAF Worksheet on
Page 10 to figure the Illinois portion of that income, and include
the amount from Line 3 of the worksheet.

Line 13: Taxable IRA distributions

Do not enter an amount on this line. As a nonresident, your IRA
distributions are not taxed by Illinois.

Line 14: Taxable pensions and annuities

Do not enter an amount on this line. As a nonresident, your pensions
and annuities are not taxed by Illinois.

	 ine 15: Rental real estate, royalties, partnerships, S
L
corporations, trusts, etc.

Figure the total amount to enter on this line by adding
■	 the net amount of income or loss, other than business income,
you received from
►	real estate located in Illinois.
►	tangible personal property, to the extent it was used in
Illinois.
Note: You can determine the extent of Illinois use of tangible
personal property by dividing the number of days the property
was in Illinois during the rental or royalty period in the taxable
year by the number of days the property was everywhere
during all rental or royalty periods in the taxable year. Multiply
the resulting fraction by the net amount of rents and royalties
received.
►	patents and copyrights (the amount that was used in Illinois).
Note: A patent is used in Illinois when it is employed in the
production, fabrication, manufacturing, or other processing of
a product, or when a patented product is produced in Illinois.
A copyright is used in Illinois when the printing or publication 	
	 originated in Illinois.
■	 income or loss you received from an Illinois business. If your
business was conducted
►	entirely in Illinois, include the amount from Column A.
►	both inside and outside Illinois, complete the IAF Worksheet
on Page 10 to figure the Illinois portion of that income, and
include the amount from Line 3 of the worksheet.
■	 income or loss you received from partnerships, S corporations,
trusts, and estates as directed by Illinois Schedules K-1-P and
K-1-T.

Line 16: Farm income or loss

All farm income or loss you included on federal Schedule F, Profit
or Loss from Farming, and that you received from an Illinois farm is
taxed by Illinois. If your farm income or loss was received
■	 entirely in Illinois, enter the amount from Column A.
■	 both inside and outside Illinois, complete the IAF Worksheet on
Page 10 to figure the Illinois portion of that income, and include
the amount from Line 3 of the worksheet.

Line 17: Unemployment Compensation

Enter the total amount of unemployment compensation you received
from the Illinois Department of Employment Security.

Line 18: Taxable Social Security benefits

Do not enter an amount on this line. As a nonresident, your Social
Security benefits are not taxed by Illinois.

							

Page 3 of 10

Nonresident Instructions
Line 19: Other income

Note: Only include losses in Column B that are included in Column A.
Enter the total amount of income that you received from
■	 the Illinois State Lottery, Illinois gambling, and sports
wagering winnings (even if you were a resident of a reciprocal
state). Payments of winnings from sports wagering are
conducted in accordance with the Sports Wagering Act for tax
years ending on or after December 31, 2021.
■	 the sale of your Illinois State Lottery installment payments.
■	 a business net operating loss (NOL) from an earlier year that is
being carried forward. If your loss was derived
►	from a partnership or an S corporation, the loss is allocated
to Illinois to the same extent that business income from that
entity is apportioned to Illinois on the Illinois Schedule K-1-P
for this year.
►	from a business you conducted entirely in Illinois, the entire
amount is allocated to Illinois.
►	from a business you conducted inside and outside Illinois,
figure the Illinois portion on the IAF Worksheet, Page 10, and
include the amount from Line 3 of the worksheet.
■	 a recovery or reimbursement for a deduction claimed in a prior
year to the extent that the deduction was allocated to Illinois.

Line 27: Self-employed SEP, SIMPLE, and qualified plans

Figure the amount of your Illinois deduction by completing the
following calculation using the ISE decimal, and enter the amount on
Line 27, Column B.	

	

.

	 ×	

	

= $	

	
ISE decimal	
Column A, Line 27	
Column B, Line 27
Line 28: Self-employed health insurance deduction

Figure the amount of your Illinois deduction by completing the
following calculation using the ISE decimal, and enter the amount on
Line 28, Column B.

	

	

.

ISE decimal 	

	 ×	

Column A, Line 28	

	

= $	

Column B, Line 28

If this deduction is for health insurance premiums paid for you (or
reimbursed to you) by an S corporation and reported to you as
wages, include the amount in Column B if your wages from the
S corporation are included in Line 5, Column B.

Line 29: Penalty on early withdrawal of savings

Enter the penalty amount you paid when you withdrew money from
a business savings account earning interest that is allocated to
Illinois. If only a portion of the interest on the account is allocated to
Illinois, allocate the same portion of this penalty to Illinois.

Line 20: Follow the instructions on Schedule NR.

Line 30: Alimony paid

Line 21: Follow the instructions on Schedule NR.
Line 22: Educator expenses

Line 31: IRA deduction

Line 23: Certain business expenses of reservists,
performing artists, and fee-basis government officials

	 Wages, salaries, tips, earned income 	 Wages, salaries, tips, alimony, earned
received from an Illinois source 	
	income received from all sources

Enter the amount of alimony you paid during the tax year as shown
in Column A.

Adjustments to Income

Figure the amount of your Illinois IRA deduction by completing the
calculation below, and enter the result on Line 31, Column B.

Write the amount of educator expenses you deducted this year that
were incurred in connection with your Illinois employment.

÷

	 nter the amount of business expenses you deducted this year
E
for which the related compensation is allocable to Illinois. If only a
portion of the compensation related to your total business expenses
shown in Column A is allocated to Illinois, allocate the same portion
of these expenses to Illinois in Column B.

Decimal

Line 35: Other adjustments

Self-employment decimal for Lines 26, 27, and 28

Complete the following calculation to determine your Illinois
self-employment (ISE) decimal for use on Lines 26, 27, and 28. The
ISE decimal may not exceed 1.0 or be less than zero.
	

=	

Self-employment income	
on federal Schedule SE	
Part I, Line 3	
plus 5a

.

Illinois selfemployment (ISE)
decimal

Line 26: Deductible part of self-employment tax

Figure the amount of your Illinois deduction for self-employment tax
by completing the following calculation, and enter the amount on
Line 26, Column B.

	
	

.

ISE decimal 	

	×	

Column A, Line 26	

	

= $	

Column B, Line 26	

Column B, Line 31

Enter the amount of Archer MSA deduction you received this year as
shown in Column A.

Enter the amount of expenses you paid if you are a member of the
Armed Forces on active duty and, due to a military order, you move
to Illinois because of a permanent change of station. See Federal
Form 3903 Instructions.

÷	

$

Line 33: RESERVED
Line 34: Archer MSA deduction

Line 25: Moving expenses for members of the Armed
Forces

	

=

Enter the amount of student loan interest you deducted this year as
shown in Column A.

	 nter the amount of health savings account deduction you claimed
E
this year as shown in Column A.

	

Column A, Line 31 	

Line 32: Student loan interest deduction

Line 24: Health savings account deduction

	
Self-employment	
	
income included	
	
in Column B	
		

×

=

	

Use this line only if the Internal Revenue Service instructs you
to include an amount on your federal Form 1040 or 1040-SR,
Schedule 1, Line 24 that is not listed as a separate line item on the
federal Form 1040 or 1040-SR, Schedule 1, Lines 11 through 23.
Include only the amount of unlisted items, not the Line 25 total.
If the federal adjustment is
■	 an item of income, you may include the subtraction in Column B 	
	only if the amount is included as income in Column B on
another line of this Schedule NR.
■	 an expenditure related to income, you may include in Column B 	
the same percentage of Column A as the percentage of the total 	
	related income included in Column B on any line of this
schedule.
■	 an expenditure unrelated to income, you may include in Column
B the amount from Column A.

Lines 36 through 38: Follow the instructions on Schedule NR.

Page 4 of 10					

IL-1040 Schedule NR Instructions (R-12/23)

Nonresident Instructions
Step 4: Figure your Illinois additions and
subtractions	
Column A – Form IL-1040 Total

Enter the amounts in Column A from your Form IL-1040 by following
the instructions on Schedule NR.

Column B – Illinois Portion

To determine the Illinois portion of additions and subtractions, you
must read and follow the instructions for each line.
Note: Partnerships, S corporations, trusts, or estates
If you received an Illinois Schedule K-1-P or K-1-T, refer to that
form’s instructions to figure the amount to include on each line.

Additions

Line 39: Federally tax-exempt interest and dividend income
Interest and dividends, except from a business, are not taxed by
Illinois. Federally tax-exempt interest income you received as part
of a business conducted in Illinois is taxed by Illinois. If this income
was received
■	 entirely in Illinois, enter the amount from Column A.
■	 both inside and outside Illinois, complete the IAF Worksheet on
Page 10 to figure the Illinois portion of that income, and include
the amount from Line 3 of the worksheet.

Line 40: Other additions

Include the following:
■	 any distributive share of additions received from partnerships,
S corporations, trusts, and estates as reported on Schedules
K-1-P and K-1-T.
■	 any Lloyd’s plan of operation loss if reported on your behalf
on Form IL-1065, Partnership Replacement Tax Return, and
included in your adjusted gross income.
■	 any nonbusiness amount you reported on Form IL-4562,
Special Depreciation, that resulted from Illinois property.
■	 any business amounts you reported on Form IL-4562 and the
addition for Student-Assistance Contribution Credit claimed on
Schedule 1299-C, Income Tax Subtractions and Credits. If the
amount was incurred in a business conducted
●	 entirely in Illinois, enter the amount from Column A.
●	 both inside and outside Illinois, complete the IAF Worksheet
on Page 10 to figure the Illinois portion of that income, and
include the amount from Line 3 of the worksheet.
■	 business expense recapture if you reported income from
an asset or activity as business income in prior years and
reported any income from that asset or activity as nonbusiness
income on your Schedule NR for this year. Enter the amount of
business expense recapture included in Column A multiplied by
the greater of
►	the decimal on Line 1 of the IAF Worksheet on Page 10, or
►	the decimal on Line 1 of the IAF Worksheet for this year plus
the IAF decimals for your two most recent years, divided
by 3. If you filed Schedule NR for only one prior year, add
the IAF decimal from that year’s Schedule NR and the IAF
decimal from this year’s Schedule NR, and divide by 2.
■	 recapture of deductions for contributions to Illinois college
savings plans and ABLE plans transferred to an out-of-state
plan.
■	 recapture of deductions for contributions to college savings
plans withdrawn for nonqualified expenses or refunded.

Line 41: Follow the instructions on Schedule NR.

Subtractions

Line 42: Federally taxed Social Security and retirement
income

Do not enter an amount on this line. As a nonresident, federally
taxed Social Security and retirement income are not taxed by Illinois
and should not be included in Column B, Lines 13, 14, or 18.

Line 43: Illinois Income Tax overpayment

Enter the amount of any Illinois Income Tax overpayment that you
included in Column B, Line 8.

Line 44: Other subtractions

Include the total amount of the following:
■	 “Bright Start” or “Bright Directions” College Savings Pool 	
contributions and “College Illinois” Prepaid Tuition
Program contributions from your Schedule M, Other Additions
and Subtractions for Individuals, Line 13.
■	 Restoration of amounts held under claim of right from your 	
Schedule M, Line 15.	
■	 Contributions to a job training project from your Schedule M,	
Line 16.
Use the instructions for each of the following items to figure the
amount to include:
■	 Enter the amount of the following items from your Schedule NR,	
Column A, Line 44 that is included as income in Column B of
any line of your Schedule NR. 	
►	August 1, 1969, valuation limitation
►	River Edge Redevelopment Zone and High Impact
Business Dividend Subtraction
►	Ridesharing money and other benefits
►	Payment of life insurance, endowment, or annuity
benefits received
►	Lloyd’s plan of operation income if reported on your
behalf on Form IL-1065
►	Illinois Pre-Need Cemetery Sales Act trust income
►	Education loan repayments to primary care physicians	
Reparations or other amounts received as a victim of
persecution by Nazi Germany
►	Interest from obligations of Illinois state and local
government
►	Your child’s interest income reported on federal Form
8814
■	 Military pay - Enter the amount of military pay you received 	
	for duty in the U.S. Armed Forces. This income must be
included in your federal adjusted gross income and in Column
B, Line 5.
■	 U.S. government obligations - Enter the amount of any
interest income from U.S. Treasury bonds, bills, notes, savings
bonds, and U. S. agency interest you included in Column B,
Line 6.
■	 Distributive share of subtractions from a partnership, 	S
corporation, trust, or estate - Enter the nonresident member’s 	
	or beneficiary’s share apportioned or allocated to Illinois
and reported to you on Column B of the Schedule K-1-P or
Schedule K-1-T from the partnership, S corporation, trust, or
estate.
■	 Expenses of federally tax-exempt income and federal credits
- For expenses related to
►	federal credits, include the amount from Column A.
►	income that is exempt from federal taxation, multiply the
amount in Column A by the percentage of that income
included in Column B of your Schedule NR for the line on
which this income was added back to your base income.

IL-1040 Schedule NR Instructions (R-12/23) 								

Page 5 of 10

Nonresident/Part-Year Resident Instructions
■	 Special Depreciation subtraction - Enter any amount 		
	you reported on Form IL-4562, Special Depreciation. If this
depreciation was incurred in a business conducted
►	entirely in Illinois, enter the amount from Column A.
►	both inside and outside Illinois, complete the IAF Worksheet
on Page 10 to figure the Illinois portion of that income, and
include the amount from Line 3 of the worksheet.
■	 Contributions made to a qualified Illinois ABLE account - 	
	from your Schedule M, Other Additions and Subtractions for 	
	Individuals, Line 20.
■	 Recovery of items previously deducted on federal Form
1040, Schedule A - Enter any amount from Column A that is
included as income in Column B, Line 8 or Line 19.
■	 Non-U.S. bond interest - Enter the amount of any interest 	
income from bonds issued by the governments of Guam, Puerto
Rico, or the Virgin Islands, or the mutual mortgage insurance
fund that you included in Column B, Line 6 or Line 39.

■	 Railroad sick pay and railroad unemployment - Enter any 	
	amount from Column A that is included as income in Column B, 	
	Line 5.
■	 Unjust imprisonment compensation awarded by Illinois 	
Court of Claims - Do not enter an amount on this line.
■	 Distributions from “Bright Start,” “Bright Directions,” and 	
“College Illinois” college savings plans - Enter the amount
of distributions you included in Line 37 because you claimed a
federal American Opportunity or Lifetime Learning Credit to the
extent you included the distributions in Line 38.

Line 45 – Follow the instructions on Schedule NR.

Step 5: Figure your Illinois income and
tax
	Lines 46 through 52 – Follow the instructions on Schedule NR.

Part-Year Resident Step-by-Step Instructions
Step 1: Provide the following information
Line 1: Check the “Yes” box if

■	 you were a full-year resident of Illinois during the tax year, or
■	 your filing status is “married filing jointly,” and your spouse was
a full-year resident of Illinois during the tax year.
Check the “No” box if
■	 you are not filing a joint return, and you were not a full-year
resident of Illinois during the tax year, or
■	 you are filing a joint return, and neither you nor your spouse
was a full-year resident of Illinois during the tax year. 			
Note: If you check the “Yes” box on Line 1, you cannot use
Schedule NR. If you file your Illinois return indicating your filing
status as “married filing jointly” and one spouse is a full-year
resident of Illinois, you must file your return using full-year residency
status. However, if you are filing a joint federal return and one
spouse is an Illinois resident while the other is a part-year resident,
you may choose to file with Illinois as “married filing separately.”
In this case, do not recompute any items on your federal return.
Instead, you must divide each item of income and deduction shown
on your joint federal return between your separate Illinois returns
following the Allocation Worksheet in the Form IL-1040 Instructions.
The spouse filing as a part-year resident must attach a completed
Schedule NR.
As a part-year resident, you may be allowed to take a credit against
Illinois Income Tax for income tax you paid to another state if the
income you earned while an Illinois resident is also being taxed by
another state. See the instructions for Form IL-1040, Line 16 and
Schedule CR, Credit for Tax Paid to Other States.

Line 2a: Enter the dates that you lived in Illinois during the tax

year, the name of the other state where you lived during the tax
year, and the dates you lived in the other state. Attach a separate
sheet of paper with this information if you need more room.

Line 2b: If your filing status is “married filing jointly,” enter the dates
your spouse lived in Illinois during the tax year, the name of the
other state where your spouse lived during the tax year, and the
dates your spouse lived in the other state. Attach a separate sheet
of paper with this information if you need more room.

Note: You must enter dates that fall within the tax year (January
2023 through December 2023, for calendar-year filers) on Lines 2a
and 2b. For example, if you or your spouse
■	 began living in Illinois on or before January 1, 2023, enter
01/01/23.
■	 began living in Illinois after January 1, 2023, enter the actual
month, day, and year you began living in Illinois.
■	 moved out of Illinois on or after December 31, 2023, enter
12/31/23.
■	 moved out of Illinois before December 31, 2023, enter the
actual month, day, and year you moved out of Illinois.

Line 3: If you were a resident of Iowa, Kentucky, Michigan, or

Wisconsin, during any part of the tax year or were living in Illinois
only to accompany your military service member spouse who was
stationed In Illinois, check the appropriate box.
Note: If you check the military spouse box, attach the military
service member’s Form W-2 showing military wages.

Line 4: If you earned income or filed an income tax return in any
state other than those listed on Lines 2 and 3, enter the two-digit
abbreviation of the state(s) on the lines provided.

Step 2: Complete Form IL-1040

Complete Lines 1 through 10 of your Form IL-1040 as if you were a
full-year Illinois resident. Follow the Form IL-1040 Instructions.

Step 3: Figure the Illinois portion of your
federal adjusted gross income
Column A – Federal Total

In Column A of each line, except Line 19, enter the amounts exactly
as reported on the corresponding line of your federal income tax
return.
Note: Line 19, Other income, should not include any net operating
loss (NOL) carryforward to this year that is available to carry forward
to next year. See Form IL-1040, Line 1 instructions.
Note: If you filed a joint federal income tax return and are filing a
separate Illinois return, include in Column A only your share of the
amounts from your joint federal income tax return. Complete the
Allocation Worksheet in the Form IL-1040 Instructions to determine
your share of the amounts from your joint federal return.

Page 6 of 10					

IL-1040 Schedule NR Instructions (R-12/23)

Column B – Illinois Portion

Part-Year Resident Instructions

Enter the portion of Column A, Federal Total, that is taxed by Illinois.
To determine the taxable amount, you must read and follow the
instructions for each line. As a part-year resident, you must include
the income you received from any source during the time you were
a resident, plus the Illinois income you received during the time you
were a nonresident.
Note: If you received an Illinois Schedule K-1-P or K-1-T, refer to
that form’s instructions to figure the amount to include on each line.
For the purposes of determining if income was received by you
while you were an Illinois resident, all income from these entities is
considered received on the last day of the entity’s tax year.

Income

Line 5: Wages, salaries, tips, etc.

Enter the amount of all wages you received as an Illinois resident,
including wages received from employment in Iowa, Kentucky,
Michigan, or Wisconsin.
Also include all Illinois wages you received while you were a
nonresident. These wages are identified as Illinois wages on the
Illinois copy of your W-2 forms.
Do not include any Illinois wages you received while
■	 you were a resident of Iowa, Kentucky, Michigan, or Wisconsin.
■	 you were living in Illinois only to accompany your military service
member spouse who was stationed in Illinois.
■	 you were living in Illinois and elected to use your military service
member spouse’s state of residence for tax purposes.
Note: If the Illinois wages as shown on your W-2 are incorrect, you
must attach a letter from your employer, on company letterhead,
stating the correct amount of Illinois wages and Illinois Income Tax
withheld. We will not accept a letter from you or your tax preparer.
Note: If any of your wages are for military pay, be sure to complete
Step 4, Line 44 and Schedule M.

Line 6: Taxable interest

Enter the total amount of interest income from Column A you
received as an Illinois resident. Also, include any business interest
income you received while you were a nonresident and that you
received from an Illinois business conducted
■	 entirely in Illinois, enter the amount from Column A.
■	 both inside and outside Illinois, complete the IAF Worksheet on
Page 10 to figure the Illinois portion of that income, and include
the amount from Line 3 of the worksheet.
Interest income you received while you were a nonresident, other
than business interest income, is not taxed by Illinois.

Line 7: Ordinary dividends

Enter the total amount of dividend income from Column A you
received as an Illinois resident. Also, include business dividend
income you received while you were a nonresident and that you
received from an Illinois business conducted
■	 entirely in Illinois, enter the amount from Column A.
■	 both inside and outside Illinois, complete the IAF Worksheet on
Page 10 to figure the Illinois portion of that income, and include
the amount from Line 3 of the worksheet.
Any dividend income you received while a nonresident, other than
business dividend income, is not taxed by Illinois.

Line 8: Taxable refunds, credits, or offsets of state and
local income taxes

Enter the amount of any income tax refund from Column A you
received as an Illinois resident and any Illinois Income Tax refund
you received while you were a nonresident. Include these refunds
only if they are included in your taxable income because you
claimed them as itemized deductions on a previous year’s federal
return.

If you received a refund from business taxes, you must include any
refund you received as a nonresident to the extent that the original
deduction was allocated to Illinois.

Line 9: Alimony received

Enter the amount of alimony you received as an Illinois resident.

Line 10: Business income or loss

Enter the amount of business income or loss from Column A you
received as an Illinois resident. Also, include the amount of business
income or loss you received while a nonresident and that you
received from an Illinois business conducted
■	 entirely in Illinois, enter the amount from Column A.
■	 both inside and outside Illinois, complete the IAF Worksheet on
Page 10 to figure the Illinois portion of that income, and include
the amount from Line 3 of the worksheet.

Line 11: Capital gain or loss

Enter any capital gains or losses from Column A you received as
an Illinois resident. Include any capital gains or losses, other than
business capital gains or losses, you received while a nonresident
and that were associated with the sale of real property or tangible
personal property located in Illinois at the time of the sale or
exchange.
Also, include any capital gains or losses you received while a
nonresident from an Illinois business conducted
■	 entirely in Illinois, enter the amount from Column A.
■	 both inside and outside Illinois, complete the IAF Worksheet on
Page 10 to figure the Illinois portion of that income, and include
the amount from Line 3 of the worksheet.
Note: You may include any capital loss amounts only to the extent
those loss amounts were included in your federal adjusted gross
income.

Line 12: Other gains or losses

Enter the total amount of other gains or losses from Column A you
received as an Illinois resident and any amount you received while
you were a nonresident from an Illinois business conducted
■	 entirely in Illinois, enter the amount from Column A.
■	 both inside and outside Illinois, complete the IAF Worksheet on
Page 10 to figure the Illinois portion of that income, and include
the amount from Line 3 of the worksheet.

Line 13: Taxable IRA distributions

Enter the amount of IRA distributions from Column A you received
as an Illinois resident, regardless of where you were a resident when
you made the contributions.

Line 14: Taxable pensions and annuities

Enter the amount of pensions and annuities from Column A you
received as an Illinois resident, regardless of the source.

Line 15: Rental real estate, royalties, partnerships, S
corporations, trusts, etc.

Enter the total amount of income or loss from Column A you
received as an Illinois resident. Include any amount you received
from Illinois sources while you were a nonresident. Add the total
■	 net amount of income or loss, other than business income, that
you received from
►	real estate located in Illinois.
►	tangible personal property, to the extent it was used in
Illinois.
		
Note: You can determine the extent of Illinois use of tangible 	
		 personal property by dividing the number of days the 		
		 property was in Illinois during the rental or royalty period in 	
		 the taxable year by the number of days the property was 		
		 everywhere during all rental or royalty periods in the taxable 	
		 year. Multiply the resulting fraction by the net amount of rents 	
		 and royalties received.

IL-1040 Schedule NR Instructions (R-12/23)							

Page 7 of 10

Part-Year Resident Instructions
►	patents and copyrights (the amount used in Illinois).
	
Note: A patent is used in Illinois when it is employed in the 	
	
production, fabrication, manufacturing, or other processing of a 	
	
product, or when a patented product is produced in Illinois.
	A copyright is used in Illinois when the printing or publication 	
	
originated in Illinois.
■	 income or loss you received from an Illinois business conducted
►	entirely in Illinois, enter the amount from Column A.
►	both inside and outside Illinois, complete the IAF Worksheet
on Page 10 to figure the Illinois portion of that income, and
include the amount from Line 3 of the worksheet.
■	 income or loss from partnerships, S corporations, trusts, and
estates as directed on Illinois Schedules K-1-P and K-1-T.

Line 23: Certain business expenses of reservists,
performing artists, and fee-basis government officials

Enter the amount of business expenses you deducted this year
for which the related compensation is allocable to Illinois. If only a
portion of the compensation related to your total business expenses
shown in Column A is allocated to Illinois, allocate the same portion
of these expenses to Illinois in Column B.

	Line 24: Health savings account deduction

Enter the amount of health savings account deduction you claimed
this year as shown in Column A.

	 ine 25: Moving expenses for members of the Armed
L
Forces

Enter the amount of moving expenses you paid if you are a member
of the Armed Forces on active duty and, due to a military order, you
move to Illinois because of a permanent change of station. See
Federal Form 3903 Instructions. If you moved outside of Illinois, you
must provide receipts showing the expenses were paid while you were
an Illinois resident.

Line 16: Farm income or loss

Enter the total amount of farm income or loss from Column A you
received as an Illinois resident. Also, include farm income or loss
you received while a nonresident if this income or loss was received
■	 entirely in Illinois, enter the amount from Column A.
■	 both inside and outside Illinois, complete the IAF Worksheet on
Page 10 to figure the Illinois portion of that income, and include
the amount from Line 3 of the worksheet.

Self-employment decimal for Lines 26, 27, and 28

Complete the following calculation to determine your Illinois
self-employment (ISE) decimal for use on Lines 26, 27, and 28. The
ISE decimal may not exceed 1.0 or be less than zero.

Line 17: Unemployment Compensation

Enter the total amount of unemployment compensation from Column
A you received while you were an Illinois resident and the total
amount of unemployment compensation you received from the
Illinois Department of Employment Security as a nonresident.

Line 18: Taxable Social Security benefits

Enter the total amount of Social Security income from Column A you
received as an Illinois resident.

	

	
Self-employment	
	
income included	
	
in Column B	
		

Line 20: Follow the instructions on Schedule NR.

Adjustments to Income

Line 21: Follow the instructions on Schedule NR.
Line 22: Educator expenses

Write the amount of educator expenses from Column A you 		
	established this year in connection with your
■	 employment while you were an Illinois resident, or
■	 Illinois employment while you were a nonresident.

÷	

	

=	

Self-employment income	
on federal Schedule SE	
Part I, Line 3	
plus 5a

.

Illinois selfemployment (ISE)
decimal

	

Line 26: Deductible part of self-employment tax

Figure the amount of your Illinois deduction for self-employment tax
by completing the following calculation, and enter the amount on
Line 26, Column B.

Line 19: Other income

Note: Only include losses in Column B that are included in Column A.
Enter the total amount of other income from Column A you received
as an Illinois resident, plus any amount you received while you were
a nonresident from
■	 the Illinois State Lottery, sports wagering, and Illinois
gambling winnings (even if you were a resident of a reciprocal
state). Payments of winnings from sports wagering are
conducted in accordance with the Sports Wagering Act for tax
years ending on or after December 31, 2021.
■	 the sale of your Illinois State Lottery installment payments.
■	 a business net operating loss (NOL) from an earlier year that is
being carried forward. If your loss was derived
►	from a partnership or an S corporation, the loss is allocated
to Illinois to the same extent that business income from that
entity is apportioned to Illinois on the Illinois Schedule K-1-P
for this year.
►	from a business you conducted entirely in Illinois, the entire
amount is allocated to Illinois.
►	from a business you conducted inside and outside Illinois,
figure the Illinois portion on the IAF Worksheet, Page 10, and
include the amount from Line 3 of the worksheet.
■	 a recovery or reimbursement for a deduction from a prior year
to the extent that the deduction was allocated to Illinois.

	

.

	
	

ISE decimal 	

	

×	

Column A, Line 26	

	

= $	

Column B, Line 26	

Line 27: Self-employed SEP, SIMPLE, and qualified plans

Figure the amount of your Illinois deduction by completing the
following calculation using the ISE decimal, and enter the amount on
Line 27, Column B.	

	

.

	 ×	

	

= $	

	
ISE decimal	
Column A, Line 27	
Column B, Line 27
Line 28: Self-employed health insurance deduction

Figure the amount of your Illinois deduction by completing the
following calculation using the ISE decimal, and enter the amount on
Line 28, Column B.

	

	

.

ISE decimal 	

	 ×	

Column A, Line 28	

	

= $	

Column B, Line 28

If this deduction is for health insurance premiums paid for you (or
reimbursed to you) by an S corporation and reported to you as
wages, include the amount in Column B if your wages from the S
corporation are included in Line 5, Column B.

Line 29: Penalty on early withdrawal of savings

Enter the amount from Column A you paid as an Illinois resident
when you withdrew money from a savings account plus any penalty
you paid while a nonresident that is allocated to Illinois. If only a
portion of the interest on the account is allocated to Illinois, allocate
the same portion of this penalty to Illinois.

Line 30: Alimony paid

Enter the amount of alimony you paid during the tax year as shown
in Column A.

Page 8 of 10					

IL-1040 Schedule NR Instructions (R-12/23)

Part-Year Resident Instructions
Line 31: IRA deduction

Line 40: Other additions

Figure the amount of your Illinois IRA deduction as follows, and
enter the amount on Line 31, Column B.

÷	

	

	 Wages, salaries, tips, alimony,	
earned income included in Column B	

	

	

	

Decimal	

×	

=

Wages, salaries, tips, alimony, earned
income received from all sources

Column A, Line 31

=	

$	

	Column B, Line 31

Line 32: Student loan interest deduction

Enter the amount of student loan interest you deducted this year as
shown in Column A.

Line 33: RESERVED
Line 34: Archer MSA deduction

Enter the amount of Archer MSA deduction you received this year as
shown in Column A.

Line 35: Other adjustments

Use this line only if the Internal Revenue Service instructs you to
include an amount on your federal Form 1040 or 1040-SR, Schedule
1, Line 24 that is not listed as a separate line item on the federal
Form 1040 or 1040-SR, Schedule 1, Lines 11 through 23. Include
only the amount of unlisted items, not the Line 25 total.
If the federal adjustment is
■	 an item of income, you may include the subtraction in Column B 	
only if the amount is included as income in Column B on another	
line of this Schedule NR.
■	 an expenditure related to income, you may include in Column B 	
the same percentage of Column A as the percentage of the total 	
related income included in Column B on any line of this
Schedule NR.
■	 an expenditure unrelated to income, you may include in Column
B the amount from Column A.

Lines 36 through 38 - Follow the instructions on Schedule NR.

Step 4: Figure your Illinois additions and
subtractions	
Column A — Form IL-1040 Total

Enter the amounts in Column A from your Form IL-1040 by following
the instructions on Schedule NR.

See the nonresident instructions for Line 40 for a list of other
additions. Include each of the items from Column A that you
received or incurred while an Illinois resident. You must also include
on this line the Illinois portion of any federally tax-exempt interest
income reported on federal Form 8814 and any earnings distributed
from IRC Section 529 college savings programs you received while
you were a resident if they are not included in your federal adjusted
gross income.
Also, include the amount of the items you received while a
nonresident to the extent required in the nonresident instructions for
Line 40.
Enter the total Illinois amount of other additions.

	Line 41: Follow the instructions on Schedule NR.

	Subtractions

Line 42: Federally taxed Social Security and retirement
income

Enter the amount of federally taxed Social Security and retirement
income from Column A you received as an Illinois resident and
that is included in the Illinois portion of your federal adjusted gross
income, Line 38. For most taxpayers, this is the total of Column B,
Lines 13, 14, and 18.

Line 43: Illinois Income Tax overpayment

Enter the amount of any Illinois Income Tax overpayment you
included in Column B, Line 8. 	

Line 44: Other subtractions

See the nonresident instructions for Line 44 for a list of other
subtractions. Include each of the items you received or incurred
while an Illinois resident. You must include on this line the Illinois
portion of any deductible interest income reported on federal Form
8814.
Also, include the amount of the items you received while a
nonresident to the extent required in the nonresident instructions for
Line 44.

Line 45 – Follow the instructions on Schedule NR.

Step 5: Figure your Illinois income and
tax

Lines 46 through 52 – Follow the instructions on Schedule NR.

Column B — Illinois Portion

To determine the Illinois portion of additions and subtractions, you
must read and follow the instructions for each line.

Additions
Line 39: Federally tax-exempt interest and dividend income

Enter the amount of federally tax-exempt interest from Column A you
received as an Illinois resident.
Interest and dividends, other than from a business, you received
while a nonresident are not taxed by Illinois.
Include any federally tax-exempt interest income you received while
a nonresident that came from an Illinois business conducted
■	 entirely in Illinois, enter the amount from Column A.
■	 both inside and outside Illinois, complete the IAF Worksheet on
Page 10 to figure the Illinois portion of that income, and include
the amount from Line 3 of the worksheet.

IL-1040 Schedule NR Instructions (R-12/23)							

Page 9 of 10

Business or Farm Income
Apportionment Formula (IAF) Worksheet
You must complete this worksheet if, while a nonresident of Illinois, you received business or farm income from both inside and
outside of Illinois. If you have more than one source of business or farm income, make copies of this worksheet and prepare a separate
worksheet for each line of the Schedule NR on which you reported business income.

	
	 Worksheet for Schedule NR, Line

		
	

Column A		

Total sales everywhere 	

Column B	

Total sales inside Illinois

	

				

	

	 1	Figure your apportionment factor.

	

	

	

	

Column C	

	

Apportionment Factor	
Column B ÷ Column A

1	

	 2	Enter the amount of your business or farm income from Schedule NR, Column A. 	 	2	

	3	 Apportioned Income – Multiply Line 2 by the Line 1 decimal. Enter the result here and on the
		corresponding line on Schedule NR, Column B. 	
		

3	

Keep a copy of this worksheet with your income tax records.
		

IAF Worksheet Instructions
Line 1: Apportionment factor

	Column A

Enter the total amount of sales you received from both inside and
outside Illinois.

	Column B

Enter the total amount of sales you received in Illinois.

	Column C	

Divide Column B by Column A. Carry the decimal to six places.
This is your apportionment factor.

Line 3:	Apportioned income 	

Multiply the amount of your business or farm income, Line 2, by the
apportionment factor, Line 1 decimal. Enter the result on Line 3 and
on the corresponding line of Schedule NR, Column B.
Note: If you need more detailed instructions, see the instructions
for Form IL-1120, Corporation Income and Replacement Tax
Return, Step 4. If your business income was derived from a
transportation company, an insurance company, or a financial
organization, see Form IL-1120 Specific Instructions for
“Apportionment Formulas.”

	Line 2:	Business or farm income 	

Enter the amount of your business or farm income from the
appropriate line on Schedule NR, Column A.

IL-1040 Schedule NR Instructions (R-12/23)							
					

Page 10 of 10