Plenty of people in Illinois are starting to wonder, in light of the changing tax landscape, if it might be beneficial to become a non-resident of Illinois, to relocate themselves or their business to another state to a sufficient degree to avoid Illinois taxes. While this may be a sound plan for some people (that would depend on the particulars of their unique tax situation), it is important to note that becoming a non-resident is not as simple as renting a P.O. box across state lines. Even getting a driver’s license in a new state and a new voter registration may still not be enough to make you or your business a non-resident in the eyes of Illinois. It’s also worth noting that while relocation to a new state may provide income tax relief or otherwise improve your tax situation, Illinois also happens to be one of the few states that does not tax pensions. Thus it is conceivable that a move across state lines could actually create a worse tax situation overall.
The general rule is this: it’s much easier to go from being a non-resident to a resident than to go in the other direction. Determining whether a change in residency is beneficial and making sure such a change is executed properly is a complex process, highly contingent on the specifics of your tax situation. For more information and for help with answering these questions, or or other tax concerns, contact the Chicago tax attorneys at Horowitz & Weinstein.