100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB2425

 

Introduced , by Rep. Ryan Spain

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/704A

    Amends the Illinois Income Tax Act. Provides that an employer with fewer than 25 employees shall make returns for withholding taxes annually. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB2425LRB100 08703 HLH 18839 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Income Tax Act is amended by
5changing Section 704A as follows:
 
6    (35 ILCS 5/704A)
7    Sec. 704A. Employer's return and payment of tax withheld.
8    (a) In general, every employer who deducts and withholds or
9is required to deduct and withhold tax under this Act on or
10after January 1, 2008 shall make those payments and returns as
11provided in this Section.
12    (b) Returns. Every employer shall, in the form and manner
13required by the Department, make returns with respect to taxes
14withheld or required to be withheld under this Article 7 for
15each quarter beginning on or after January 1, 2008, on or
16before the last day of the first month following the close of
17that quarter. On and after January 1, 2017, an employer with an
18average employee head count of fewer than 25 employees during
19the previous calendar year shall make returns with respect to
20taxes withheld or required to be withheld under this Article 7
21annually.
22    (c) Payments. With respect to amounts withheld or required
23to be withheld on or after January 1, 2008:

 

 

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1        (1) Semi-weekly payments. For each calendar year, each
2    employer who withheld or was required to withhold more than
3    $12,000 during the one-year period ending on June 30 of the
4    immediately preceding calendar year, payment must be made:
5            (A) on or before each Friday of the calendar year,
6        for taxes withheld or required to be withheld on the
7        immediately preceding Saturday, Sunday, Monday, or
8        Tuesday;
9            (B) on or before each Wednesday of the calendar
10        year, for taxes withheld or required to be withheld on
11        the immediately preceding Wednesday, Thursday, or
12        Friday.
13        Beginning with calendar year 2011, payments made under
14    this paragraph (1) of subsection (c) must be made by
15    electronic funds transfer.
16        (2) Semi-weekly payments. Any employer who withholds
17    or is required to withhold more than $12,000 in any quarter
18    of a calendar year is required to make payments on the
19    dates set forth under item (1) of this subsection (c) for
20    each remaining quarter of that calendar year and for the
21    subsequent calendar year.
22        (3) Monthly payments. Each employer, other than an
23    employer described in items (1) or (2) of this subsection,
24    shall pay to the Department, on or before the 15th day of
25    each month the taxes withheld or required to be withheld
26    during the immediately preceding month.

 

 

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1        (4) Payments with returns. Each employer shall pay to
2    the Department, on or before the due date for each return
3    required to be filed under this Section, any tax withheld
4    or required to be withheld during the period for which the
5    return is due and not previously paid to the Department.
6    (d) Regulatory authority. The Department may, by rule:
7        (1) Permit employers, in lieu of the requirements of
8    subsections (b) and (c), to file annual returns due on or
9    before January 31 of the year for taxes withheld or
10    required to be withheld during the previous calendar year
11    and, if the aggregate amounts required to be withheld by
12    the employer under this Article 7 (other than amounts
13    required to be withheld under Section 709.5) do not exceed
14    $1,000 for the previous calendar year, to pay the taxes
15    required to be shown on each such return no later than the
16    due date for such return.
17        (2) Provide that any payment required to be made under
18    subsection (c)(1) or (c)(2) is deemed to be timely to the
19    extent paid by electronic funds transfer on or before the
20    due date for deposit of federal income taxes withheld from,
21    or federal employment taxes due with respect to, the wages
22    from which the Illinois taxes were withheld.
23        (3) Designate one or more depositories to which payment
24    of taxes required to be withheld under this Article 7 must
25    be paid by some or all employers.
26        (4) Increase the threshold dollar amounts at which

 

 

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1    employers are required to make semi-weekly payments under
2    subsection (c)(1) or (c)(2).
3    (e) Annual return and payment. Every employer who deducts
4and withholds or is required to deduct and withhold tax from a
5person engaged in domestic service employment, as that term is
6defined in Section 3510 of the Internal Revenue Code, may
7comply with the requirements of this Section with respect to
8such employees by filing an annual return and paying the taxes
9required to be deducted and withheld on or before the 15th day
10of the fourth month following the close of the employer's
11taxable year. The Department may allow the employer's return to
12be submitted with the employer's individual income tax return
13or to be submitted with a return due from the employer under
14Section 1400.2 of the Unemployment Insurance Act.
15    (f) Magnetic media and electronic filing. Any W-2 Form
16that, under the Internal Revenue Code and regulations
17promulgated thereunder, is required to be submitted to the
18Internal Revenue Service on magnetic media or electronically
19must also be submitted to the Department on magnetic media or
20electronically for Illinois purposes, if required by the
21Department.
22    (g) For amounts deducted or withheld after December 31,
232009, a taxpayer who makes an election under subsection (f) of
24Section 5-15 of the Economic Development for a Growing Economy
25Tax Credit Act for a taxable year shall be allowed a credit
26against payments due under this Section for amounts withheld

 

 

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1during the first calendar year beginning after the end of that
2taxable year equal to the amount of the credit for the
3incremental income tax attributable to full-time employees of
4the taxpayer awarded to the taxpayer by the Department of
5Commerce and Economic Opportunity under the Economic
6Development for a Growing Economy Tax Credit Act for the
7taxable year and credits not previously claimed and allowed to
8be carried forward under Section 211(4) of this Act as provided
9in subsection (f) of Section 5-15 of the Economic Development
10for a Growing Economy Tax Credit Act. The credit or credits may
11not reduce the taxpayer's obligation for any payment due under
12this Section to less than zero. If the amount of the credit or
13credits exceeds the total payments due under this Section with
14respect to amounts withheld during the calendar year, the
15excess may be carried forward and applied against the
16taxpayer's liability under this Section in the succeeding
17calendar years as allowed to be carried forward under paragraph
18(4) of Section 211 of this Act. The credit or credits shall be
19applied to the earliest year for which there is a tax
20liability. If there are credits from more than one taxable year
21that are available to offset a liability, the earlier credit
22shall be applied first. Each employer who deducts and withholds
23or is required to deduct and withhold tax under this Act and
24who retains income tax withholdings under subsection (f) of
25Section 5-15 of the Economic Development for a Growing Economy
26Tax Credit Act must make a return with respect to such taxes

 

 

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1and retained amounts in the form and manner that the
2Department, by rule, requires and pay to the Department or to a
3depositary designated by the Department those withheld taxes
4not retained by the taxpayer. For purposes of this subsection
5(g), the term taxpayer shall include taxpayer and members of
6the taxpayer's unitary business group as defined under
7paragraph (27) of subsection (a) of Section 1501 of this Act.
8This Section is exempt from the provisions of Section 250 of
9this Act.
10    (h) An employer may claim a credit against payments due
11under this Section for amounts withheld during the first
12calendar year ending after the date on which a tax credit
13certificate was issued under Section 35 of the Small Business
14Job Creation Tax Credit Act. The credit shall be equal to the
15amount shown on the certificate, but may not reduce the
16taxpayer's obligation for any payment due under this Section to
17less than zero. If the amount of the credit exceeds the total
18payments due under this Section with respect to amounts
19withheld during the calendar year, the excess may be carried
20forward and applied against the taxpayer's liability under this
21Section in the 5 succeeding calendar years. The credit shall be
22applied to the earliest year for which there is a tax
23liability. If there are credits from more than one calendar
24year that are available to offset a liability, the earlier
25credit shall be applied first. This Section is exempt from the
26provisions of Section 250 of this Act.

 

 

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1(Source: P.A. 96-834, eff. 12-14-09; 96-888, eff. 4-13-10;
296-905, eff. 6-4-10; 96-1027, eff. 7-12-10; 97-333, eff.
38-12-11; 97-507, eff. 8-23-11.)
 
4    Section 99. Effective date. This Act takes effect upon
5becoming law.