Illinois DOR Issues Information on Individual Income Deduction Allocation for Alimony Paid to Illinois Resident

The Illinois Department of Revenue (DOR) Jan. 27 issued a general information letter clarifying that alimony deductions must be allocated to the state where income was earned for individual income tax purposes. Taxpayer and her ex-husband were Illinois residents and Taxpayer earned income from another state. Taxpayer paid income tax in the other state, but they disallowed the deduction for alimony paid in Illinois. Taxpayer received a Return Correction Notice recomputing taxes based on the deduction disallowance, and disputed the notice as a double taxation of the alimony. The DOR concluded: 1) only income taxable by other states applying Illinois ...