Are you preparing to move to Illinois or have you recently relocated to the state? While you probably have a lot on your plate, one important thing you should be considering now is establishing residency in Illinois as soon as possible. By establishing residency, you can take advantage of the low flat income tax in Illinois sooner and avoid being on the hook for taxes in your former state. You can even qualify for in-state tuition if you or your children decide to attend college.
Ready to find out how to establish Illinois residency? Here’s what you need to know.
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Why Establishing Illinois Residency Is Important
As a general rule, establishing Illinois residency doesn’t require much intentional action. Simply living in Illinois for a certain amount of time will make you officially an Illinois resident, after all. Still, there are several important reasons for establishing residency in Illinois intentionally and as quickly as possible.
What are the benefits of becoming an Illinois resident? By quickly establishing residency, you’ll find it easier to get a driver’s license and vote in your new state. It may also be crucial for qualifying for certain benefits and government programs. Depending on the state from which you are moving, it may also be vital to officially become an Illinois resident to avoid dual taxation and other complications with state income taxes and the IRS. You will also be able to qualify for lower in-state tuition at college.
How to Become an Illinois Resident
You don’t need to take any formal steps to establish Illinois state residency. Many of the actions you will take anyway after moving will help you establish residency, but these steps should be taken as soon as possible. Unlike some states like Florida, Illinois does not allow you to record an official Declaration of Domicile that establishes your intent to permanently reside in the state. Instead, you will take these unofficial steps to become an Illinois resident.
Buy or Rent a Home in Illinois
The first step to establishing residency in Illinois is establishing your new primary home in the state. You can do this by buying a home or signing a lease. Be sure to save important documents that can be used to prove residency if needed including your signed lease.
Get an Illinois Driver’s License
You can continue using your current out-of-state driver’s license for up to 90 days after moving to Illinois. Still, it’s a good idea to transfer an out-of-state license to Illinois as soon as possible to establish residency.
You will need to visit a Secretary of State facility to pass a vision test, written exam, and surrender your old license. Be prepared to show proof of name, birth date, Social Security number, and Illinois residency. Here is a list of accepted documents. Residency can be proved with a utility bill, pay stub, official mail, lease or mortgage paperwork, bank statements, and more.
Register a Vehicle in Illinois
Registering your car in Illinois is an important step that shouldn’t be put off after moving. You will need proof of Illinois residency (such as a lease), completed Form VSD 190 which can be completed online, proof of ownership, a description of your vehicle, and lienholder information. The fees include a $101 registration fee, sales tax, and a $95 title fee.
To register your car, visit an Illinois Secretary of State office with the documents and payment. You’ll receive a temporary title and registration with the permanent documents sent in the mail.
Update Your Address with the USPS & Tax Agencies
An important step to avoid tax issues and help prove your Illinois residency is updating your address with tax agencies and the post office. This includes the Internal Revenue Service, the Illinois Department of Revenue, and the Department of Revenue in your former state.
To update your address with the IRS, you can complete Form 8822, Change of Address, and send it to the appropriate address. You can also notify the IRS in writing or file a new tax return using your new address.
You can provide a new address for the Illinois Department of Revenue online through MyTax Illinois.
The USPS also allows you to change your address online.
Register to Vote in Illinois
You can register to vote in Illinois in many ways including when you get your driver’s license. It can also be done online through the Illinois Online Voter Application from the State Board of Elections.
How to Establish Illinois Residency in Other Ways
There may be other ways to establish residency in Illinois. These steps can be helpful particularly if you move from a state that tries to continue taxing you or otherwise claiming you as a resident.
- Renew your passport with your new Illinois address.
- Enroll children in an Illinois public school district.
- Get a license for your pets with the city or county. In Chicago, this is done through the City of Chicago’s Office of the City Clerk.
- Switch to an Illinois bank or update your bank address.
- Notify the Social Security Administration of your new address.
- Apply for a professional license in Illinois.
What Is Proof of Illinois Residency?
You may find it helpful to understand which types of documents can be used to provide proof Illinois residency. The following are just some documents that can help you prove you meet Illinois residency requirements and rules.
- State of Illinois tax return
- Federal income tax return with an Illinois address
- Illinois driver’s license or ID card
- Illinois auto registration
- Rent or utility bills in your name with an Illinois address
- Lease in your name
- Property tax bill in your name
- W-2 and 1099 statements
- Illinois voter’s registration card
- Statement of benefits from the Social Security Administration, Department of Employment Security, or the Illinois Department of Healthcare and Family Services
Illinois Residency for Tuition Purposes
One of the most important reasons to establish Illinois state residency is to qualify for Illinois in-state tuition. What determines Illinois residency? It depends on whether you are a dependent or independent student.
If you are a dependent student, you can be considered a resident of Illinois for tuition and scholarship purposes if a parent who must complete the FAFSA paperwork physically lives in Illinois with a permanent residence. If the parent’s permanent residence becomes Illinois after the FAFSA paperwork is completed, the parent’s and student’s state of address and mailing address must be corrected on the Student Aid Report (SAR) and their Institutional Student Information Record (ISIR).
Independent students can establish Illinois residency by physically living in Illinois for the 12 continuous months immediately before the start of the academic year.
Establishing Residency in Illinois for Tax Purposes
Under the Illinois Income Act, you must pay income tax on income you earn or receive in Illinois or as a resident of Illinois. For tax purposes, Illinois residency rules state that you are an Illinois resident unless you:
- Locate somewhere else with the intention of establishing the location in another state as your domicile, and
- You abandon your intention of returning to Illinois.
If you split time between Illinois and another state like Florida, you can establish residency in Florida through steps like registering to vote in Florida, getting a driver’s license in Florida, and filing a declaration of domicile in Florida. This allows an Illinois part-time resident to avoid paying Illinois income taxes on income they did not earn in Illinois.
If you are an Illinois part-time resident but maintain Illinois as your primary domicile, you will be considered an Illinois resident for tax purposes. Temporary absences like leaving the state for the winter will not affect Illinois residency.
Establishing Illinois residency isn’t difficult, but it does require a few official steps like getting a new driver’s license and updating your address. The sooner you establish residency, the easier it will be to take steps like registering your car and voting. You can also avoid potential tax issues with your former state by taking care of these steps soon after moving.
Ready to settle into your new life in Illinois? Once you’ve signed the lease or officially bought a home, call the helpful movers at Federal Companies for a free moving estimate. While we can’t help with tasks like car registration and utilities, we can take the burden and stress of relocating off your shoulders!