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Kentuckyworking inIllinois
Reciprocity — home state withholds for you

Illinois

Work State Tax Rate
Flat 4.95%
Withholding Starts
After 30 days
Law Last Updated
No change 2025/2026

Employee Obligations (Which Returns YOU Must File)

Kentucky has a reciprocity agreement with Illinois. If your only income from Illinois is wages, salary, tips, or commissions, file your Kentucky return only — no Illinois return needed. Give your Illinois employer your reciprocity form (42A809) each year.

Employer Obligations (What Your Employer Must Withhold & Remit)

Reciprocity applies. If the employee provides the reciprocity form (42A809), withhold Kentucky tax instead of Illinois tax. Must still register for Illinois unemployment insurance. Register for withholding and unemployment. Unemployment applies to the first $13,590 of wages.

Reciprocity Agreement — File Home State Only for Wages

Kentucky has a reciprocity agreement with Illinois. For wage income, you only need to file your Kentucky return. Give your employer the reciprocity form (42A809) each year to avoid Illinois withholding.

Row last reviewed: May 9, 2026Home state credit form: Schedule OTP-CR

This is general information, not tax or legal advice. Laws change frequently. Always consult a licensed CPA or tax attorney for your specific situation. All information researched as of March 21, 2026.