Illinois withholding requirements 

As an employer in the state of Illinois, you need to register your business with IDOR (Illinois Department of Revenue) by online, mail or in person at an IDOR regional office. You can make use of the Illinois Business Registration Application at MyTax Illinois for online registration.

There is no fee to register your business with IDOR.

Illinois withholding calculations and deposits for your organization are automatically done by PayWow during each payroll. Your state filing will also be taken care within due dates

State Unemployment Insurance (SUI)

The State Unemployment Insurance (SUI) program provides compensation to eligible employees who have lost their jobs through no fault of their own. The Illinois Department of Employment Security is responsible for SUI for the state of Illinois.

Illinois Taxable Wage Base 2020

The taxable wage base for 2020 is $12,740.00

Illinois Employer Contribution Rate

The maximum and minimum contribution rate for 2020 is 0.625% and 6.825%, respectively

Employers Quarterly UI Tax and Wage reports

  • 1st quarter returns and payments due on or before April 30

  • 2nd quarter returns and payments due on or before July 31

  • 3rd quarter returns and payments due on or before October 31

  • 4th quarter returns and payments due on or before January 31.

In case of due date falling on weekends (Saturday and Sunday) or a state-recognized holiday, the due date is extended to the next business day.

Note: It is mandatory that you file quarterly returns even if no contributions are due. You will be subject to a penalty if you fail to file. 

If you choose PayWow as your payroll service provider, you can focus more on your business without worrying about the due dates on payments and filings.

State labor laws

Minimum Wage Rate

To be an employer at Illinois, you need to offer a minimum wage of $9.25 per hour.

If you are an employer with 'tipped employees', you need to pay at least $4.95 hourly cash wage with the record of tips that would compensate the minimum wage of $9.25 per hour. If the tips don't add up to the minimum wage, you need to pay the difference.

PayWow lets you handle minimum wage adjustments at ease while you run payroll for your employees.

New hire reporting

If you are an employer in Illinois, you need to report the newly hired and rehired employees to the Illinois Department of Employment Security within 20 days of the employee's first day on the payroll and provide all the necessary information.

In case of reporting electronically, employees can be reported as two monthly transmissions, which shouldn't be less than 12 days nor more than 16 days apart.

To complete the New hire report, details of your name, address, Federal Identification Number (FEIN) must be provided along with the employee's name, address, and Social Security number (SSN).

A penalty of $15 will be subjected every time for failure to file a newly hired individual, and $500 if found conspiring with a new employee for not supplying the required information or supplying false or incomplete information.

You can also choose PayWow to report a newly hired employee to Illinois to receive both your copy and the employee's copy.

Withholding tax forms

Form IL-941- Quarterly Income Tax Withholding Return

As an employer, you are required to file Form IL-941, Quarterly Income Tax Withholding Return, with the state of Illinois to reconcile the state tax paid for the quarter with the tax withheld for the quarter.

It's necessary that you file Form IL-941, even if no tax was withheld during the reporting period.

Form IL-941 filing deadline

First Quarter: Jan to March (April 30)

Second Quarter: April to June (July 31)

Third Quarter: July to September (November 2)

Fourth Quarter: October to December (February 1)

Note: If the due date falls on a weekend or holiday, then the deadline is automatically extended to the next business day.

Illinois state tax forms

Listed below are the required state forms of Illinois:

  • IL-1040-Individual Income Tax Return

  • Form IL-941- Quarterly Income Tax Withholding Return

  • IL-1040-ES- Estimated Income Tax Payments for Individuals

  • IL-1040-V- Payment Voucher for Individual Income Tax

Illinois State Disbursement Unit

The Illinois State Disbursement Unit acts as a payment processing center for children in the Illinois state by processing the checks received from you non-custodial parents and disburses the funds via check, direct deposit or debit card to the receiving families. You can find more details on the ILSDU fact sheet.

Withholding rules in Illinois state

As an employer, you should withhold income tax for an employee who meets the following requirements:

  • The employee performs services for you in the state.

  • The employee performs services in Illinois for more than 30 working days during the tax year.

  • The services aren’t incidental to services they perform outside the states.

You can choose Paywow to file and pay your taxes. But first, a few information is needed from your end

  • Illinois State Withholding Tax ID

  • MyTax Illinois Account

  • Illinois Unemployment ID

  • Illinois employer contribution rate

  • Illinois taxable wage base

  • Illinois Power of Attorney Forms