Illinois Form IL-W-5-NR

Illinois Form IL-W-5-NR, officially titled Employee’s Statement of Nonresidence in Illinois, is a document issued by the Illinois Department of Revenue for employees who live outside Illinois but receive compensation for work connected with Illinois. Its primary purpose is to allow qualifying employees to claim an exemption from Illinois income tax withholding under applicable reciprocal withholding agreements or the Military Spouses Residency Relief Act. The form applies to residents of Iowa, Kentucky, Michigan, and Wisconsin who receive compensation paid in Illinois and qualify for the relevant reciprocal tax treatment. It also applies to certain military spouses who maintain residency in another state and are present in Illinois solely because their military spouse is stationed there. By completing the declaration in Part 1, an eligible employee identifies their state of residence and provides the information needed by the employer to support the withholding exemption. Part 2 collects the employer’s identification and business address information, allowing the employee and employer to be identified on the same document. The employee must provide the completed form to their Illinois employer rather than treating it as a substitute for an annual income tax return. Employers are required to maintain a copy for each qualifying employee who receives Illinois-paid compensation and elects exemption under the reciprocal withholding agreements, or who qualifies for the military spouse exemption. The form also establishes an important notification requirement: if an employee changes their state of residence, the employer must be notified within ten days. Providing accurate personal details, selecting the correct residency declaration, and signing and dating the form are essential because the document is used to support the employee’s claim that Illinois income tax withholding should not apply to the qualifying compensation. The form also states that disclosure of the requested information is required under the Illinois Income Tax Act and that failure to provide the information may prevent processing and may result in a penalty.

Who Must Complete Form IL-W-5-NR?

The form identifies two main categories of employees who may need to complete Part 1.

Residents Of Iowa, Kentucky, Michigan, Or Wisconsin

You must complete Part 1 if you are a resident of any of the following states:

• Iowa
• Kentucky
• Michigan
• Wisconsin

This applies when you receive compensation paid in Illinois and your wages qualify for exemption from Illinois income tax withholding under the applicable reciprocal withholding agreement.

The form allows qualifying residents to identify their state of residence and declare their eligibility for the withholding exemption.

Military Spouses Living In Illinois

You must also complete Part 1 if all the following conditions apply:

1. Your spouse is a member of the United States military.
2. Your spouse is stationed in Illinois.
3. You and your spouse are both residents of the same state other than Illinois.
4. You are present in Illinois only because your military spouse is stationed there.
5. Your wages qualify for exemption from Illinois income tax withholding under the Military Spouses Residency Relief Act.

In this situation, you must identify your state of residency and declare that your presence in Illinois is solely connected to your spouse’s military assignment.

How To File Form IL-W-5-NR

Form IL-W-5-NR is submitted directly to your Illinois employer.

It is not presented on the form as an annual Illinois income tax return. Instead, it provides the employer with the employee’s residency declaration and information supporting the applicable exemption from Illinois income tax withholding.

Where To Submit Form IL-W-5-NR

After completing Part 1, submit the form to your Illinois employer.

The form specifically instructs employees to file the completed document with their employer.

Employers must retain a copy for each employee who meets the applicable requirements and elects the exemption.

What Information Should You Prepare?

Before completing the form, gather the following information:

Employee Information

• Social Security number.
• Full legal name.
• Mailing address.
• City.
• State of residence.
• ZIP code.

Residency Information

• State of legal residence.
• Confirmation that the state is Iowa, Kentucky, Michigan, or Wisconsin, if claiming the reciprocal withholding exemption.
• Your spouse’s state of residence, if claiming the military spouse exemption.
• Confirmation that your presence in Illinois is solely due to your military spouse’s stationing there, when applicable.

Employer Information

• Federal Employer Identification Number (FEIN).
• Employer’s legal name.
• Employer’s mailing address.
• City.
• State.
• ZIP code.

Final Information

• Employee’s signature.
• Date of signature.

How To Complete Form IL-W-5-NR

The form contains two main sections, Part 1 for employee information and Part 2 for employer information.

It also includes a residency declaration, employee signature, date field, and an informational statement concerning the Illinois Income Tax Act.

Complete the fields carefully and make sure the residency declaration matches your actual circumstances.

Part 1: Employee Information

Part 1 collects the employee’s identifying information and establishes the state of residence supporting the Illinois withholding exemption.

Employee Identification Details

Social Security Number

Enter your complete nine-digit Social Security number in the designated field.

The form provides separate spaces for the number, arranged in the standard Social Security number format.

Check the digits before submitting the document to ensure that your identifying information is accurate.

Name

Enter your complete legal name.

Use the name associated with your Social Security records and employment documentation.

Mailing Address

Enter your complete mailing address.

Include the street number, street name, and any applicable apartment or unit information.

Use an address where you can receive correspondence.

City

Enter the name of the city in which your mailing address is located.

State

Enter the two-letter abbreviation for the state associated with your mailing address.

For example, use IA for Iowa, KY for Kentucky, MI for Michigan, or WI for Wisconsin when applicable.

ZIP Code

Enter the ZIP code associated with your mailing address.

Make sure the ZIP code matches the city and state entered above.

Employee Residency Declaration

This is the most important part of Form IL-W-5-NR because it identifies the legal basis for claiming exemption from Illinois income tax withholding.

The form provides two alternative declarations.

Select the declaration that accurately describes your circumstances.

Declaration 1: Resident Of Iowa, Kentucky, Michigan, Or Wisconsin

Select the appropriate state from the four available choices:

• Iowa
• Kentucky
• Michigan
• Wisconsin

Choose the state in which you are a resident.

This declaration is intended for employees who qualify for exemption from Illinois income tax withholding under the reciprocal withholding agreements between Illinois and these states.

Do not select a state simply because you previously lived there or have employment connections there. The declaration concerns your state of residence.

Declaration 2: Military Spouse Residency Declaration

This alternative applies when you and your spouse are residents of the same state other than Illinois, and you are present in Illinois only because your spouse is a member of the United States military stationed in Illinois.

Complete the blank field by entering the two-letter abbreviation for your state of residency.

For example, if both you and your military spouse are residents of Texas, enter TX.

The declaration confirms the following circumstances:

• You and your spouse share the same state of residency.
• Your state of residency is not Illinois.
• Your spouse is a member of the United States military.
• Your spouse is stationed in Illinois.
• You are present in Illinois only because of your spouse’s military assignment.

This declaration is used for the exemption provided under the Military Spouses Residency Relief Act.

Employee Signature And Date

Employee’s Signature

Sign your name in the designated signature field.

Your signature confirms the residency declaration made on the form.

Make sure the information entered in Part 1 is accurate before signing.

Date

Enter the date on which you sign the form.

Use the appropriate date format and ensure that the date is legible.

Part 2: Employer Information

Part 2 collects information identifying the Illinois employer associated with the employee’s withholding exemption.

Complete or verify the employer details so that the employee and employer can be properly identified.

Employer Identification Details

Federal Employer Identification Number (FEIN)

Enter the employer’s complete Federal Employer Identification Number.

The FEIN is the federal identification number assigned to the employer.

Do not enter the employee’s Social Security number in this field.

Name

Enter the employer’s legal business name.

Use the name associated with the employer’s business and tax identification records.

Mailing Address

Enter the employer’s complete mailing address.

Include the street number and street name, together with any applicable suite or unit information.

City

Enter the city in which the employer’s mailing address is located.

State

Enter the two-letter abbreviation for the state associated with the employer’s address.

ZIP Code

Enter the employer’s ZIP code.

Verify that the city, state, and ZIP code correspond to the employer’s mailing address.

Employer Responsibilities And Recordkeeping

Form IL-W-5-NR also explains the responsibilities of employers who receive the completed declaration.

Maintaining A Copy Of The Form

Employers must keep a copy of Form IL-W-5-NR on file for each employee who meets the applicable conditions.

The requirement applies to employees who:

• Are residents of Iowa, Kentucky, Michigan, or Wisconsin.
• Receive compensation paid in Illinois.
• Elect exemption from Illinois income tax withholding under the reciprocal withholding agreements between Illinois and their state of residence.

The employer must also retain a copy for employees whose compensation qualifies for exemption under the Military Spouses Residency Relief Act.

Employee Residency Changes

The form specifically establishes a notification requirement for employees.

If you change your state of residence, you must notify your employer within ten days.

This requirement is important because the original withholding exemption declaration is based on your residency circumstances.

If your state of residence changes, the information previously provided may no longer accurately describe your circumstances.

Notify your employer within the specified ten-day period.

Understanding The Legal Declaration

Form IL-W-5-NR contains a statement explaining that it is authorized under the Illinois Income Tax Act.

It also explains that disclosure of the requested information is required.

The form warns that failure to provide the required information may result in the document not being processed and may also result in a penalty.

This makes accurate completion important for both the employee and employer.

Before signing, review the following:

• Your Social Security number is correct.
• Your name matches your identifying records.
• Your mailing address is accurate.
• Your state of residence is correctly identified.
• You have selected the appropriate residency declaration.
• Your military spouse circumstances are accurately represented, if applicable.
• Your employer’s identifying information is complete.
• Your signature and date are provided.

Important Things To Remember When Completing Form IL-W-5-NR

1. Check Your Eligibility: The form is intended for qualifying residents of Iowa, Kentucky, Michigan, and Wisconsin, or qualifying military spouses.
2. Use Your Actual State Of Residence: Enter the state in which you are a resident, not simply the state where you work.
3. Select The Correct Declaration: Choose the reciprocal withholding declaration or military spouse declaration that matches your circumstances.
4. Provide The Correct Social Security Number: Enter your personal Social Security number in Part 1.
5. Do Not Confuse Employee And Employer Information: Part 1 identifies the employee, while Part 2 identifies the employer.
6. Enter The Employer’s FEIN: Use the employer’s Federal Employer Identification Number rather than your personal identification number.
7. Sign And Date The Form: An unsigned or incomplete declaration may not be processed.
8. Submit It To Your Employer: The completed form must be filed with your Illinois employer.
9. Keep Your Residency Information Updated: Notify your employer within ten days if your state of residence changes.
10. Understand The Employer’s Recordkeeping Requirement: Your employer must maintain a copy when the applicable exemption requirements are met.

Final Review Before Filing

Before submitting Form IL-W-5-NR, use this checklist to verify that all required information has been provided.

Part 1: Employee Information

• Social Security number is entered correctly.
• Employee’s full legal name is provided.
• Mailing address is complete.
• City is entered.
• State abbreviation is correct.
• ZIP code is accurate.

Residency Declaration

• Correct residency declaration is selected.
• Iowa, Kentucky, Michigan, or Wisconsin is selected when claiming the applicable reciprocal withholding exemption.
• Military spouse declaration is selected when applicable.
• Two-letter state abbreviation is entered for the military spouse declaration.
• You and your spouse are residents of the same state other than Illinois, when claiming the military spouse exemption.
• Your presence in Illinois is solely due to your spouse’s military stationing, when applicable.

Employee Authorization

• Employee’s signature is provided.
• Signature date is entered.
• All information has been reviewed for accuracy.

Part 2: Employer Information

• Federal Employer Identification Number is entered.
• Employer’s legal name is provided.
• Employer’s mailing address is complete.
• Employer’s city is entered.
• Employer’s state is identified.
• Employer’s ZIP code is accurate.

Final Submission

• Completed Form IL-W-5-NR is submitted to the Illinois employer.
• Employer retains a copy as required.
• Employee understands the ten-day notification requirement for a change of state residency.

Final Reminder: Illinois Form IL-W-5-NR is used by qualifying nonresident employees to declare their eligibility for exemption from Illinois income tax withholding under reciprocal withholding agreements or the Military Spouses Residency Relief Act. Complete Part 1 with accurate personal and residency information, provide the employer details in Part 2, and sign and date the declaration before submitting it to your Illinois employer. Remember that any change in your state of residence must be reported to your employer within ten days.