IL‑W‑5‑NR

This article gives clear, line‑by‑line instructions to understand, file, and complete Illinois Form IL‑W‑5‑NR correctly, without skipping any field or step.

Form IL‑W‑5‑NR is the Illinois Department of Revenue’s “Employee’s Statement of Nonresidence in Illinois,” used by certain employees to claim exemption from Illinois income tax withholding because they do not reside in Illinois and qualify under either a reciprocal agreement or the Military Spouses Residency Relief Act (MSRRA). In plain terms, if an employee lives in Iowa, Kentucky, Michigan, or Wisconsin and earns wages for work paid in Illinois, they may elect to have no Illinois tax withheld by filing this form due to reciprocal withholding agreements Illinois maintains with those states; alternatively, if a worker’s spouse is on active military orders stationed in Illinois and both spouses are legal residents of the same non‑Illinois state, the employee can also claim exemption under MSRRA. Employers must keep a completed IL‑W‑5‑NR on file for each qualifying employee who chooses this exemption, and employees must alert the employer within ten days if residency changes; failing to provide required information can prevent processing and may trigger penalties.

Who Must Complete This Form

  • Residents of Iowa, Kentucky, Michigan, or Wisconsin who receive compensation paid in Illinois and choose exemption based on reciprocal agreements.
  • Nonresident spouses covered by MSRRA: the employee and spouse share the same non‑Illinois state of residency, and the employee is in Illinois only because the spouse (a U.S. service member) is stationed there.

How To File IL‑W‑5‑NR

  • Complete Part 1 (Employee Information and declaration) in full, sign, and date.
  • Provide the form to the Illinois employer; do not mail to the Department of Revenue.
  • Notify the employer within ten days of any change in residency status or MSRRA eligibility.
How To Complete IL‑W‑5‑NR

How To Complete IL‑W‑5‑NR

Part 1 — Employee Information

  • Social Security Number: Enter your SSN exactly as shown on your Social Security card; this ties your exemption to payroll records.
  • Name: Write your full legal name (first, middle initial, last) to match payroll and tax documents.
  • Mailing Address: Provide your current mailing address, including apartment or unit number if applicable.
  • City: Enter the city for your mailing address.
  • State: Enter the two‑letter state abbreviation for your mailing address.
  • ZIP: Enter your five‑digit ZIP Code (add the four‑digit extension if your employer requires it).
  • Residency Declaration — Option 1 (Reciprocity): Check/affirm the statement “I am a resident of the state of Iowa, Kentucky, Michigan, or Wisconsin,” and indicate which one applies; this is the basis for exemption under the reciprocal withholding agreements.
  • Residency Declaration — Option 2 (MSRRA): If qualifying under MSRRA instead, check/affirm “My spouse and I are residents of [write the 2‑letter abbreviation for your state of residency] and I am in Illinois only because my spouse is a member of the U.S. military who is stationed in Illinois.” Fill in the non‑Illinois state abbreviation accurately. Do not select both options—choose the single basis that applies.
  • Employee’s Signature: Sign to certify the accuracy of your statements under penalties of perjury; unsigned forms are invalid.
  • Date: Enter the date you sign; the employer should retain the most recent signed version on file.

Important Notes Printed On The Form

  • You must file this form with your Illinois employer, not the state; employers are required to have a copy on file when exemption is claimed.
  • If your residency changes (for example, you move to Illinois or to a non‑reciprocal state), notify your employer within ten days to adjust withholding.
  • The form’s use is authorized by the Illinois Income Tax Act; disclosure is required, and failure to provide information can prevent processing and may result in penalties.
  • The fillable PDF supports keyboard navigation (Tab/mouse) and checkbox toggling; you may see on‑form buttons such as Reset or Print for convenience.

Part 2 — Employer Information

  • Federal Employer Identification Number (FEIN): Employer enters the company’s nine‑digit FEIN to associate the employee’s exemption with payroll records.
  • Name: Employer’s legal business name as used for tax purposes.
  • Mailing Address: Employer’s mailing address for payroll/tax correspondence.
  • City: City for the employer’s mailing address.
  • State: Two‑letter state abbreviation for the employer’s mailing address.
  • ZIP: Five‑digit ZIP Code (and +4 if required) for the employer’s mailing address.

How Employers Should Handle The Form

  • Retain a completed IL‑W‑5‑NR on file for each employee who claims the exemption; ensure the employee’s basis (reciprocity or MSRRA) is clearly indicated and the form is signed and dated.
  • Adjust Illinois income tax withholding to zero for qualifying wages once a valid form is received; continue to monitor for residency changes reported within ten days.
  • Keep the latest signed version; if an employee submits an updated form (e.g., residency change), replace the prior form in records.

Common Eligibility Scenarios

Reciprocity Example

  • An employee lives in Wisconsin but works in Illinois and is paid by an Illinois employer; by completing IL‑W‑5‑NR, the employee elects exemption from Illinois withholding under the reciprocal agreement.

MSRRA Example

  • A civilian spouse is present in Illinois solely because their spouse, an active‑duty service member, is stationed in Illinois; both spouses share the same non‑Illinois state of residence. Filing IL‑W‑5‑NR claims exemption from Illinois withholding on wages under MSRRA.

Corrections, Updates, And Replacements

  • If you made an error (e.g., wrong state abbreviation), complete and sign a new IL‑W‑5‑NR and provide it to your employer; do not alter signatures or dates on an old copy.
  • If your residency or MSRRA status changes, submit an updated form within ten days so withholding can be corrected prospectively.

Retention And Compliance Reminders

  • Employee: Keep a personal copy of the signed IL‑W‑5‑NR for your records.
  • Employer: Maintain the form with payroll records as evidence for exemption decisions in the event of audit or inquiry.
  • Accuracy Matters: The declaration is signed under penalties of perjury; ensure the chosen exemption basis matches your real residency status.i

Version And Footer Details You May See

  • The form may display a revision indicator (e.g., “IL‑W‑5‑NR R‑1210”), plus notices about authority under the Illinois Income Tax Act and disclosure requirements. These confirm you are using an official document and explain why the information is required.
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