How does Illinois decide whether someone is a resident for income tax?

The statutory test: two ways in, two ways out

Section 1501(a)(20)(A) of the Illinois Income Tax Act defines a resident individual in two limbs: an individual "who is in this State for other than a temporary or transitory purpose during the taxable year," or one "who is domiciled in this State but is absent from the State for a temporary or transitory purpose during the taxable year." The first reaches nondomiciliaries who live in Illinois in a settled way; the second keeps a domiciliary a resident through temporary absences.

The definition of part-year resident shows how each limb begins and ends. Under the first, "residence commences with presence in this State for other than a temporary or transitory purpose and ceases with absence from this State for other than a temporary or transitory purpose." Under the second, "residence commences with the establishment of domicile in this State and ceases with the establishment of domicile in another State" (35 ILCS 5/1501(a)(17)). The consequence is that an Illinois domiciliary can stop being a resident without changing domicile, by leaving for a purpose that is not temporary or transitory. The regulation agrees: a domiciliary "remains a resident unless he or she is outside Illinois for other than temporary or transitory purposes" (86 Ill. Adm. Code 100.3020(b)).

Estates and trusts are tested by domicile alone: the estate of a decedent domiciled in Illinois at death, a trust created by such a decedent's will, and an irrevocable trust whose grantor was domiciled in Illinois when it became irrevocable are residents (35 ILCS 5/1501(a)(20)(B) through (D)). The trust clause has a constitutional limit: in Linn v. Department of Revenue, 2013 IL App (4th) 121055, the court held the tax on such a trust for 2006 unconstitutional under the due process clause because the grantor's Illinois residence was not a sufficient connection (¶ 29) and the trust's trustee and noncontingent beneficiary lived outside Illinois and none of its property or business was in the state (¶ 33).

California uses the same two-limb formulation, covered in the library's article on how the FTB evaluates a claimed change of residency. The difference lies in the presumptions. California's is keyed to time in the state, more than nine months in a taxable year (FTB Publication 1031 (2025), section H). Illinois keys its presumptions to a property tax benefit and to a relative day count in the year after a resident year, and its regulation sets the rebuttal standard at clear and convincing evidence.

Temporary or transitory purpose, and domicile, as the regulation defines them

Whether a purpose is temporary or transitory "will depend upon the facts and circumstances of each particular case" (86 Ill. Adm. Code 100.3020(c)). Temporary purposes include "a brief rest or vacation" and being in Illinois to "complete a particular transaction, perform a particular contract, or fulfill a particular engagement" that "will require his or her presence in Illinois for but a short period." On the other side the regulation places presence to improve one's health where the illness requires "a relatively long or indefinite period to recuperate," business that "will require a long or indefinite period to accomplish," being "employed in a position that may last permanently or indefinitely," and having "retired from business and moved to Illinois with no definite intention of leaving shortly thereafter."

Of the subsection's three examples, two find residence (an Alaska domiciliary who moves to Illinois for medical reasons and summers in Alaska, and a claimed Nevada domiciliary who keeps his Illinois estate and connections and spends six or seven months a year there). The third does not: a Minnesota couple who winter in Illinois in a house they own, while keeping their business office, clubs and social life in Minnesota, are nonresidents because their connections to Minnesota are closer.

Domicile is "the place where an individual has his or her true, fixed, permanent home." An individual "can at any one time have but one domicile" and retains it "until he or she acquires another elsewhere"; one who comes to Illinois intending to remain indefinitely, with no fixed intention of returning to the former state, "acquires Illinois domicile the moment he or she enters the State." An Illinois domiciliary loses that domicile only "by locating elsewhere with the intention of establishing the new location as his or her domicile; and by abandoning any intention of returning to Illinois" (86 Ill. Adm. Code 100.3020(d)).

The Department's 2025 IL-1040 instructions state that an individual is an Illinois resident if "domiciled in Illinois for the entire tax year," define domicile as the place where the individual resides and intends to return after temporary absences, and list as temporary absences "duty in the U.S. Armed Forces, residence in a foreign country, out-of-state residence as a student, or out-of-state residence during the winter or summer" (Illinois Department of Revenue, 2025 IL-1040 Instructions, General Information). That guidance describes the domicile limb only and does not address, or displace, the statute's other route out of residency.

The two presumptions, and who has to prove what

The regulation provides that the following "create rebuttable presumptions of residence" (86 Ill. Adm. Code 100.3020(f)):

1. "An individual receiving a homestead exemption (see 35 ILCS 200/15-175) for Illinois property is presumed to be a resident of Illinois."
2. "An individual who is an Illinois resident in one year is presumed to be a resident in the following year if he or she is present in Illinois more days than he or she is present in any other state."

"These presumptions are not conclusive and may be overcome by clear and convincing evidence to the contrary." The regulation does not use the word "burden," but its structure allocates the burden: a presumption of residence stands until the individual rebuts it, and the standard for rebuttal is clear and convincing evidence. The day-count presumption is comparative: it asks whether Illinois outranked every other single state in the year after a resident year, not whether a set number of days was reached. Two questions the regulation does not answer: whether "any other state" in that presumption carries the Act's definition of "state," which for a jurisdiction other than Illinois includes foreign countries (35 ILCS 5/1501(a)(22)), and whether a year as a part-year resident counts as a year in which the individual was "an Illinois resident" for the presumption's purposes. No authority found addresses either.

Outside the presumptions, the statute makes the Department's findings on examination, and the amount it fixes where no return is filed, "prima facie correct" (35 ILCS 5/904(a), (b)), which places the work of showing error on the taxpayer. The taxpayer "may submit any relevant evidence," and the regulation lists the location of spouse and dependents, voter registration, vehicle registration or driver's license, a resident return filed in another state, home ownership or rental agreements, "the permanent or temporary nature of work assignments in a state," professional licenses, the location of doctors, accountants and attorneys, club memberships, and utility usage over time. The location of a tax-exempt charity to which the taxpayer contributes "is not evidence used to establish domicile or nondomicile, or residence or nonresidence, in any state" (86 Ill. Adm. Code 100.3020(g)).

An individual within a presumption who believes he or she was a nonresident with no income allocable to Illinois should file a return for that year, marked as a nonresident return, computing net income as though a resident, noting no liability, and attaching a signed statement identifying the presumption and "setting forth in detail the reasons" for nonresidency, with supporting affidavits; one who owes Illinois tax as a nonresident may instead file as a nonresident with Schedule NR and the same statement (86 Ill. Adm. Code 100.3020(g)(3), (4)). If the Department is not satisfied, it allows additional information; if the presumption is not overcome, it issues a notice of deficiency treating the individual as a resident (86 Ill. Adm. Code 100.3020(g)).

What the appellate courts have done with the test

The leading published decision is Cain v. Hamer, 2012 IL App (1st) 112833. A couple who had lived in Illinois for decades filed a Florida declaration of domicile in 1995 and then voted, held driver's licenses and bought burial plots in Florida, while keeping their longtime Illinois home, Illinois doctors and club memberships, and a time split that was nearly even (159 days in Florida and 161 in Illinois in 1996). The Department assessed tax for 1996 through 2004. On stipulated facts, the First District held them Florida domiciliaries and not Illinois residents. The court read the regulation's concept of domicile as "an intended permanent home" (¶ 19), called the Minnesota couple example in subsection (c) "particularly telling" (¶ 22), and treated the near-even day count as not controlling. It found the parties' burden-of-proof dispute "somewhat misdirected" (¶ 12) because the facts were stipulated. The opinion does not discuss the presumptions in subsection (f).

The second decision illustrates the absence limb, but its status limits its use. Grede v. Illinois Department of Revenue, 2013 IL App (2d) 120731-U, is an order entered under Illinois Supreme Court Rule 23. Under Rule 23(e)(1), such an order "is not precedential except to support contentions of double jeopardy, res judicata, collateral estoppel or law of the case," and only nonprecedential orders entered on or after January 1, 2021 "may be cited for persuasive purposes." Grede was filed April 22, 2013, so it is neither precedent nor citable even as persuasive authority, and it appears here only as an illustration. A Chicago exchange executive took a senior post in Hong Kong under three-year contracts while his family stayed in their Illinois home, on which the couple kept claiming the homestead exemption; the Director found him a resident for 2001 through 2003. The Second District accepted the finding that he remained an Illinois domiciliary, but held "clearly erroneous" the finding that the Hong Kong absence was temporary, pointing to the practice of renewing senior officers' contracts, stock options that required years of service to vest, and his search for other Hong Kong work after his contract ended. He was a nonresident under the absence limb, and the homestead claim did not preclude that, because his wife co-owned and lived in the home and could claim the exemption herself. The order does not discuss the regulatory presumption.

Three fact patterns

A Chicago executive on a multi-year foreign assignment whose family stays. The executive accepts a position abroad under a renewable multi-year contract, and the spouse and children remain in the family home. Domicile likely stays in Illinois, since the family, the home and the intention to return all point there, so residency turns on whether the absence is for a temporary or transitory purpose. Because the regulation places employment "in a position that may last permanently or indefinitely" outside the temporary category, an open-ended or customarily renewed role, compensation that vests over years, and a settled life abroad support nonresidency, while a fixed project with a defined return date supports continued residency. If the family keeps the homestead exemption in the executive's name, the first presumption applies and the executive faces a clear and convincing standard. The stakes exceed a domestic move's because the credit for tax paid to other states does not reach foreign income taxes: for the credit, "state" is limited to the states, the District of Columbia, Puerto Rico, United States territories and possessions, and their political subdivisions (35 ILCS 5/1501(a)(22)). An executive who stops filing also leaves those years open, since with no return a notice of deficiency may issue at any time (35 ILCS 5/905(c)).

A retiree splitting the year between Illinois and Florida. A longtime Illinois resident retires, buys a Florida home, and begins spending winters in Florida and summers at the Illinois house. Cain shows that a near-even split does not make the retiree an Illinois resident where the retiree's settled ties have moved to Florida. The regulation's presumptions sharpen the analysis. A homestead exemption still received on the Illinois house triggers the first presumption, and in the year after an Illinois resident year, more Illinois days than Florida days, even by a handful, triggers the second. Either one calls for a nonresident position filed as subsection (g) prescribes and supported by clear and convincing evidence, and the subsection (g) evidence list reads as a checklist for the move. The Minnesota couple example is the pattern the retiree is trying to fit, with Illinois as the seasonal state.

A new arrival. An individual relocates to Illinois from another state midyear for a job with no fixed end date. Under the first limb, residence commences "with presence in this State for other than a temporary or transitory purpose" (35 ILCS 5/1501(a)(17)), and the regulation adds that an individual who comes with the intention of remaining indefinitely and with no fixed intention of returning to the former state acquires Illinois domicile on entry (86 Ill. Adm. Code 100.3020(d)). The arrival is a part-year resident for the year of the move. An individual who instead comes to perform a particular contract that requires presence in Illinois for only a short period, keeping a home and domicile elsewhere, is in Illinois for a temporary purpose and remains a nonresident taxed only on Illinois-source income (86 Ill. Adm. Code 100.3020(c)). Once a resident, the arrival also becomes exposed to the day-count presumption in later years.

What residency changes on the return

For a resident, every item of income or deduction taken into account in computing base income "shall be allocated to this State" (35 ILCS 5/301(a)). For a nonresident, an item is allocated to Illinois "only to the extent provided by" the allocation and apportionment rules for compensation, nonbusiness income and business income (35 ILCS 5/301(c); 35 ILCS 5/302 through 304). Compensation paid in Illinois to a nonresident is allocated to Illinois (35 ILCS 5/302(a)); for tax years ending on or after December 31, 2020, compensation for work done partly in Illinois is paid in Illinois when the Illinois work is nonincidental and exceeds 30 working days in the year, and the amount paid in Illinois is then the share of the year's compensation that Illinois working days bear to all working days (35 ILCS 5/304(a)(2)(B)(iii)). Reciprocal agreements authorized by section 302(b) exempt Illinois wages of residents of Iowa, Kentucky, Michigan and Wisconsin, though not their other income (35 ILCS 5/302(b); 2025 IL-1040 Instructions, General Information).

A part-year resident allocates to Illinois all items for the resident portion of the year and, for the rest, only what sections 302 through 304 allocate (35 ILCS 5/301(b)). The Department adds that temporary absences during the year do not create part-year status (Illinois Department of Revenue, 2025 Schedule NR Instructions).

A resident whose income is also taxed by another state may claim a credit for tax "imposed upon or measured by income" paid to that state, limited for tax years ending on or after December 31, 2009 by the share of base income that would be allocated or apportioned to other states if they had all adopted Illinois's own allocation and apportionment rules (35 ILCS 5/601(b)(3)). The credit is the tax paid to the other state, capped using Illinois's own sourcing rules applied without the 30-working-day threshold (35 ILCS 5/601(b)(3)).

Practice notes

Start with the presumptions, because they change the standard of proof. Confirm whether a homestead exemption is being received on any Illinois property, in whose name, and whether it can be removed, and compute the day count against every other state for any year that follows an Illinois resident year. Where either presumption applies and the facts support nonresidency, file in the form subsection (g) prescribes, with the signed statement and supporting affidavits, rather than not filing, because the assessment period for an unfiled year never starts. For a domiciliary leaving for work, analyze the absence limb on its own terms: the contract's duration and renewal history, how compensation vests, and whether the life abroad is settled move the result. For a seasonal split, build the record the regulation lists and keep the Illinois ties consistent with a second home. For a nonresident, the 30-working-day threshold for compensation and the reciprocal agreements are the first sourcing checks. G&G State Tax Group provides Illinois residency analysis and residency audit representation alongside its state and local tax practice.