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Employer's Obligations for Illinois State Payroll Taxes

- Updated on Aug 03, 2020 - 08:00 PM by 123PayStubs Team

With 123PayStubs, you can know the tax liabilities for the pay period and generate pay stubs instantly for salaried or hourly employees and contractors in Illinois.

To create stubs, enter a few basic details like company and employee information, earnings, and pay schedule information. That's it! Our Illinois paystub generator will do all the math for you and generate pay stubs with accurate tax calculations.

Also, 123PayStubs provides information about the payroll requirements for the state of Illinois.

Calculate Illinois State Payroll Taxes and Generate Paystubs Instantly

What should employers know about the Illinois State Payroll Taxes?

123PayStubs will be suitable for those who are doing payroll on their own. As 123PayStubs covers all the information required for Illinois state withholding taxes and provides you with the exact details to keep payroll under your control.

Apart from the federal withholding, employers in Illinois are also responsible for certain state payroll tax requirements which are listed below.

Illinois State Minimum Wage Requirements

The minimum wage rate for the state of Illinois is $9.25/hr, which is slightly higher than the current federal minimum wage rate. Employers are required to pay 60% of the minimum wage to employees if gratuities are paid to them.

Though the state mandates on minimum wage payments, there are some exemptions:

Employees till their 90 days of employment can be paid 50 cents less than the usual wage rate. Tipped employees can be paid 60% of the hourly minimum wage rate.

Also, note that employees under 18 years of age who work more than 650 hours during a calendar year must be paid the state minimum wage.

Illinois State New Hire Reporting

Federal and state laws require all employers to report their newly hired and rehired employees to the Illinois Department of Labor within 20 days from their first day of payroll. Employers can report it to the Illinois Department of Employment Security.

If employers fail to report to the state agency or conspire with employees to not submit the report, the employer must pay a penalty of $500 per report.

Employers may send copies of the new hire forms to the New Hire Unit via fax or mail or may do it electronically.

There are other reporting options as well. Like, submitting the new hire report through online or magnetic filing. The state mandates all employees to report their employees to the state’s new hire directory within the said date.

Filing New Hire Report Form Online

Employers can have two options to report new hire forms. They can either choose an online reporting method where employers can use their registered username and password to report new hire forms. The status of which will also be notified through online.

Or, employers can go with a non-electronic reporting method, where the accounting, payroll, or personnel software can create a printed list of at least 10 font size to report new hires. The printed list must contain all of the required information, have the employer’s name, Federal Employer Identification Number, and address clearly displayed at the top of the report.

Mailing New Hire Report Form

Mail the completed New Hire Report Form to the following address:

date
Illinois New Hire Directory
P.O. Box 19473
Springfield, IL 62794-9473
Phone: 312-327-4473
Fax: 217-557-1947

Illinois State Withholding Tax

  • The Illinois state requires employers to withhold state income taxes from employee's pay by filling out Form IL- W4- Employee's Withholding Allowance Certificate.
  • The Illinois Department of Revenue also imposes a flat rate of 4.95% for all employers and 7% for all corporations.
  • The state has no local taxes and state disability insurance. But does support reciprocal agreements with certain states. Illinois has reciprocity with Iowa, Kentucky, Michigan, and Wisconsin. For this, employers must collect Form IL-W-5 and IL W-5-NR.
  • Form Il-W-5 is a Certificate of Residence in Illinois.
  • Form IL-W-5-NR is the Employee's Statement of Nonresidence of Illinois.

Illinois State Unemployment Insurance Tax (SUI)

  • Illinois SUTA wage base limit for 2020: $12,740
  • Illinois SUTA tax rates for 2020: 0.625 to 7.25%
  • Illinois SUTA tax rates for new employers: 3.125%
  • Illinois SUTA tax rates for mining employers: 3.425%

Other Payroll Requirements for Illinois

Illinois Termination Pay: The state of Illinois mandates the termination pay on employers. If employees resign on their own or are fired on any grounds, then they must be paid their regular wages along with any severance amount by the next regular payday. For more information on this, check this link.

Remit withholding for child support to

date
Illinois State Disbursement Unit
P.O. Box 5400
Carol Stream, IL 60197-5400
Phone: 877-664-5738

Illinois Local Taxes

There are no local taxes in the state of Illinois.

When is the Illinois state payroll tax payment due?

Illinois state requires tax payments to be made on a quarterly, monthly, and semi-weekly basis.

If the payment is due on a Saturday, Sunday, or legal holiday, the due date falls on the next business day

  • Form IL-941: Quarterly Withholding Return
  • Form IL-501: IL Withholding Tax Payment
  • Form UI-3/401: Employer’s Contribution and Wage Report

To report both the taxes withheld from employees’ wages and unemployment taxes, employers must have registered with the Department of Revenue and Department of Labor. Upon registration, payments and filings can be done through the department’s online site - MyTaxIllinois.

Illinois State Deposit Requirement

Illinois supports electronic payment and filings of tax returns and unemployment reports to the Department of Revenue and Labor through MyTaxIllinois. Employers can also manage their tax accounts online. The state also supports tax payments through EFT and ACH credits.

Quarterly Tax Deposit Requirement

  • Form IL-941 is a quarterly withholding return that is required to be filed by all employers even if no tax is withheld.
  • Employers unable to file Form IL-941 electronically must complete Form IL-900-EW to request a waiver.
  • The due dates fall on April 30, July 31, November 02, February 01.
  • If the due date falls on a weekend or holiday, the payment is due on the next business day.

Monthly & Semi-Weekly Tax Deposit Requirements

  • Form IL-501 is a withholding payment form that has two deposit schedules: Semi-Weekly and Monthly. The due dates are as follows:
  • Monthly payments are due by the 15th day of the month following the month in which the tax was withheld.
  • Semi-weekly payments are due by Wednesday for amounts withheld on the preceding Wednesday, Thursday, or Friday; and by Friday for amounts withheld on the preceding Saturday, Sunday, Monday, or Tuesday.
  • Taxpayers reporting less than $12,000 during the lookback period will be assigned a monthly schedule. Whereas, reporting more than $12,000 will be assigned a semi-weekly schedule.
  • If the due date falls on a weekend or holiday, the payment is due on the next business day.

Quarterly Illinois Payroll Tax Filings

Forms Il-941 and UI-3/40 are the two quarterly forms that the state mandates. Form IL-941 is an Illinois Withholding Income Tax Return that is due either on the last day of the month following the end of the quarter (April 30, July 31, October 31, and January 31) or on the last day of the month following the end of the year (January 31).

Whereas Form UI-3/40 is an Employer’s Contribution and Wage Report to pay unemployment insurance that is due on the last day of the month following the end of the quarter (April 30, July 31, October 31, and January 31).

If the deadline falls on a weekend or any legal holiday, then the forms are due by the next business day.

Annual Illinois Payroll Tax Filings

The state of Illinois requires employers to issue wage and tax statements (Form W-2) to their employees by January 31.

In addition to this, the state of Illinois does not require the filing of the Fourth Quarter/Annual Reconciliation Return.

123PayStubs is more than a paystub generator.

No matter which part of Illinois your business operates in, our Illinois paystub generator will let you create pay stubs for your employees and contractors with accurate tax calculations including all cities like Chicago, Aurora, Rockford. You only have to provide a few basic information such as company, employee and salary details and our pay stub generator will calculate all the applicable taxes swiftly based on the information provided. It will take less than 2 minutes to generate a pay stub. Employees and contractors in Illinois can use the pay stubs as proof of income.

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