Illinois General Assembly - Full Text of SB0068
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Full Text of SB0068  101st General Assembly

SB0068sam003 101ST GENERAL ASSEMBLY

Sen. Julie A. Morrison

Filed: 3/25/2019

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 68

2    AMENDMENT NO. ______. Amend Senate Bill 68, AS AMENDED, by
3replacing everything after the enacting clause with the
4following:
 
5    "Section 5. The Illinois Income Tax Act is amended by
6changing Section 704A as follows:
 
7    (35 ILCS 5/704A)
8    Sec. 704A. Employer's return and payment of tax withheld.
9    (a) In general, every employer who deducts and withholds or
10is required to deduct and withhold tax under this Act on or
11after January 1, 2008 shall make those payments and returns as
12provided in this Section.
13    (b) Returns. Every employer shall, in the form and manner
14required by the Department, make returns with respect to taxes
15withheld or required to be withheld under this Article 7 for
16each quarter beginning on or after January 1, 2008, on or

 

 

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1before the last day of the first month following the close of
2that quarter.
3    (c) Payments. With respect to amounts withheld or required
4to be withheld on or after January 1, 2008:
5        (1) Semi-weekly payments. For each calendar year, each
6    employer who withheld or was required to withhold more than
7    $12,000 during the one-year period ending on June 30 of the
8    immediately preceding calendar year, payment must be made:
9            (A) on or before each Friday of the calendar year,
10        for taxes withheld or required to be withheld on the
11        immediately preceding Saturday, Sunday, Monday, or
12        Tuesday;
13            (B) on or before each Wednesday of the calendar
14        year, for taxes withheld or required to be withheld on
15        the immediately preceding Wednesday, Thursday, or
16        Friday.
17        Beginning with calendar year 2011, payments made under
18    this paragraph (1) of subsection (c) must be made by
19    electronic funds transfer.
20        (2) Semi-weekly payments. Any employer who withholds
21    or is required to withhold more than $12,000 in any quarter
22    of a calendar year is required to make payments on the
23    dates set forth under item (1) of this subsection (c) for
24    each remaining quarter of that calendar year and for the
25    subsequent calendar year.
26        (3) Monthly payments. Each employer, other than an

 

 

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

 

 

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1        (3) Designate one or more depositories to which payment
2    of taxes required to be withheld under this Article 7 must
3    be paid by some or all employers.
4        (4) Increase the threshold dollar amounts at which
5    employers are required to make semi-weekly payments under
6    subsection (c)(1) or (c)(2).
7    (e) Annual return and payment. Every employer who deducts
8and withholds or is required to deduct and withhold tax from a
9person engaged in domestic service employment, as that term is
10defined in Section 3510 of the Internal Revenue Code, may
11comply with the requirements of this Section with respect to
12such employees by filing an annual return and paying the taxes
13required to be deducted and withheld on or before the 15th day
14of the fourth month following the close of the employer's
15taxable year. The Department may allow the employer's return to
16be submitted with the employer's individual income tax return
17or to be submitted with a return due from the employer under
18Section 1400.2 of the Unemployment Insurance Act.
19    (f) Magnetic media and electronic filing. With respect to
20taxes withheld in calendar years prior to 2017, any W-2 Form
21that, under the Internal Revenue Code and regulations
22promulgated thereunder, is required to be submitted to the
23Internal Revenue Service on magnetic media or electronically
24must also be submitted to the Department on magnetic media or
25electronically for Illinois purposes, if required by the
26Department.

 

 

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1    With respect to taxes withheld in 2017 and subsequent
2calendar years, the Department may, by rule, require that any
3return (including any amended return) under this Section and
4any W-2 Form that is required to be submitted to the Department
5must be submitted on magnetic media or electronically.
6    The due date for submitting W-2 Forms shall be as
7prescribed by the Department by rule.
8    (g) For amounts deducted or withheld after December 31,
92009, a taxpayer who makes an election under subsection (f) of
10Section 5-15 of the Economic Development for a Growing Economy
11Tax Credit Act for a taxable year shall be allowed a credit
12against payments due under this Section for amounts withheld
13during the first calendar year beginning after the end of that
14taxable year equal to the amount of the credit for the
15incremental income tax attributable to full-time employees of
16the taxpayer awarded to the taxpayer by the Department of
17Commerce and Economic Opportunity under the Economic
18Development for a Growing Economy Tax Credit Act for the
19taxable year and credits not previously claimed and allowed to
20be carried forward under Section 211(4) of this Act as provided
21in subsection (f) of Section 5-15 of the Economic Development
22for a Growing Economy Tax Credit Act. The credit or credits may
23not reduce the taxpayer's obligation for any payment due under
24this Section to less than zero. If the amount of the credit or
25credits exceeds the total payments due under this Section with
26respect to amounts withheld during the calendar year, the

 

 

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1excess may be carried forward and applied against the
2taxpayer's liability under this Section in the succeeding
3calendar years as allowed to be carried forward under paragraph
4(4) of Section 211 of this Act. The credit or credits shall be
5applied to the earliest year for which there is a tax
6liability. If there are credits from more than one taxable year
7that are available to offset a liability, the earlier credit
8shall be applied first. Each employer who deducts and withholds
9or is required to deduct and withhold tax under this Act and
10who retains income tax withholdings under subsection (f) of
11Section 5-15 of the Economic Development for a Growing Economy
12Tax Credit Act must make a return with respect to such taxes
13and retained amounts in the form and manner that the
14Department, by rule, requires and pay to the Department or to a
15depositary designated by the Department those withheld taxes
16not retained by the taxpayer. For purposes of this subsection
17(g), the term taxpayer shall include taxpayer and members of
18the taxpayer's unitary business group as defined under
19paragraph (27) of subsection (a) of Section 1501 of this Act.
20This Section is exempt from the provisions of Section 250 of
21this Act. No credit awarded under the Economic Development for
22a Growing Economy Tax Credit Act for agreements entered into on
23or after January 1, 2015 may be credited against payments due
24under this Section.
25    (h) An employer may claim a credit against payments due
26under this Section for amounts withheld during the first

 

 

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1calendar year ending after the date on which a tax credit
2certificate was issued under Section 35 of the Small Business
3Job Creation Tax Credit Act. The credit shall be equal to the
4amount shown on the certificate, but may not reduce the
5taxpayer's obligation for any payment due under this Section to
6less than zero. If the amount of the credit exceeds the total
7payments due under this Section with respect to amounts
8withheld during the calendar year, the excess may be carried
9forward and applied against the taxpayer's liability under this
10Section in the 5 succeeding calendar years. The credit shall be
11applied to the earliest year for which there is a tax
12liability. If there are credits from more than one calendar
13year that are available to offset a liability, the earlier
14credit shall be applied first. This Section is exempt from the
15provisions of Section 250 of this Act.
16    (i) Each employer with 50 or fewer full-time equivalent
17employees during the reporting period may claim a credit
18against the payments due under this Section for each qualified
19employee in an amount equal to the maximum credit allowable.
20The credit may be taken against payments due for reporting
21periods that begin on or after January 1, 2020, and end on or
22before December 31, 2027. An employer may not claim a credit
23for an employee who has worked fewer than 90 consecutive days
24immediately preceding the reporting period; however, such
25credits may accrue during that 90-day period and be claimed
26against payments under this Section for future reporting

 

 

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1periods after the employee has worked for the employer at least
290 consecutive days. In no event may the credit exceed the
3employer's liability for the reporting period. Each employer
4who deducts and withholds or is required to deduct and withhold
5tax under this Act and who retains income tax withholdings
6under this subsection must make a return with respect to such
7taxes and retained amounts in the form and manner that the
8Department, by rule, requires and pay to the Department or to a
9depositary designated by the Department those withheld taxes
10not retained by the employer.
11    For each reporting period, the employer may not claim a
12credit or credits for more employees than the number of
13employees making less than the minimum or reduced wage for the
14current calendar year during the last reporting period of the
15preceding calendar year. Notwithstanding any other provision
16of this subsection, an employer shall not be eligible for
17credits for a reporting period unless the average wage paid by
18the employer per employee for all employees making less than
19$55,000 during the reporting period is greater than the average
20wage paid by the employer per employee for all employees making
21less than $55,000 during the same reporting period of the prior
22calendar year.
23    For purposes of this subsection (i):
24    "Compensation paid in Illinois" has the meaning ascribed to
25that term under Section 304(a)(2)(B) of this Act.
26    "Employer" and "employee" have the meaning ascribed to

 

 

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1those terms in the Minimum Wage Law, except that "employee"
2also includes employees who work for an employer with fewer
3than 4 employees. Employers that operate more than one
4establishment pursuant to a franchise agreement or that
5constitute members of a unitary business group shall aggregate
6their employees for purposes of determining eligibility for the
7credit.
8    "Full-time equivalent employees" means the ratio of the
9number of paid hours during the reporting period and the number
10of working hours in that period.
11    "Maximum credit" means the percentage listed below of the
12difference between the amount of compensation paid in Illinois
13to employees who are paid not more than the required minimum
14wage reduced by the amount of compensation paid in Illinois to
15employees who were paid less than the current required minimum
16wage during the reporting period prior to each increase in the
17required minimum wage on January 1. If an employer pays an
18employee more than the required minimum wage and that employee
19previously earned less than the required minimum wage, the
20employer may include the portion that does not exceed the
21required minimum wage as compensation paid in Illinois to
22employees who are paid not more than the required minimum wage.
23        (1) 25% for reporting periods beginning on or after
24    January 1, 2020 and ending on or before December 31, 2020;
25        (2) 21% for reporting periods beginning on or after
26    January 1, 2021 and ending on or before December 31, 2021;

 

 

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1        (3) 17% for reporting periods beginning on or after
2    January 1, 2022 and ending on or before December 31, 2022;
3        (4) 13% for reporting periods beginning on or after
4    January 1, 2023 and ending on or before December 31, 2023;
5        (5) 9% for reporting periods beginning on or after
6    January 1, 2024 and ending on or before December 31, 2024;
7        (6) 5% for reporting periods beginning on or after
8    January 1, 2025 and ending on or before December 31, 2025.
9    The amount computed under this subsection may continue to
10be claimed for reporting periods beginning on or after January
111, 2026 and:
12        (A) ending on or before December 31, 2026 for employers
13    with more than 5 employees; or
14        (B) ending on or before December 31, 2027 for employers
15    with no more than 5 employees.
16    "Qualified employee" means an employee who is paid not more
17than the required minimum wage and has an average wage paid per
18hour by the employer during the reporting period equal to or
19greater than his or her average wage paid per hour by the
20employer during each reporting period for the immediately
21preceding 12 months. A new qualified employee is deemed to have
22earned the required minimum wage in the preceding reporting
23period.
24    "Reporting period" means the quarter for which a return is
25required to be filed under subsection (b) of this Section.
26    (j) If a private employer grants all of its employees the

 

 

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1option of taking a paid leave of absence of at least 30 days
2for the purpose of serving as an organ donor or bone marrow
3donor, then the private employer may take a credit against the
4payments due under this Section in an amount equal to the
5amount withheld under this Section with respect to wages paid
6while the employee is on organ donation leave, not to exceed
7$1,000 in withholdings for each employee who takes organ
8donation leave. To be eligible for the credit, such a leave of
9absence must be taken without loss of pay, vacation time,
10compensatory time, personal days, or sick time for at least the
11first 30 days of the leave of absence. The private employer
12shall adopt rules governing organ donation leave, including
13rules that (i) establish conditions and procedures for
14requesting and approving leave and (ii) require medical
15documentation of the proposed organ or bone marrow donation
16before leave is approved by the private employer. A private
17employer must provide, in the manner required by the
18Department, documentation from the employee's medical
19provider, which the private employer receives from the
20employee, that verifies the employee's organ donation. The
21private employer must also provide, in the manner required by
22the Department, documentation that shows that a qualifying
23organ donor leave policy was in place and offered to all
24qualifying employees at the time the leave was taken. For the
25private employer to receive the tax credit, the employee taking
26organ donor leave must allow for the applicable medical records

 

 

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1to be disclosed to the Department. If the private employer
2cannot provide the required documentation to the Department,
3then the private employer is ineligible for the credit under
4this Section. A private employer must also provide, in the form
5required by the Department, any additional documentation or
6information required by the Department to administer the credit
7under this Section. The credit under this subsection (j) shall
8be taken within one year after the date upon which the organ
9donation leave begins. If the leave taken spans into a second
10tax year, the employer qualifies for the allowable credit in
11the later of the 2 years. If the amount of credit exceeds the
12tax liability for the year, the excess may be carried and
13applied to the tax liability for the 3 taxable years following
14the excess credit year. The tax credit shall be applied to the
15earliest year for which there is a tax liability. If there are
16credits for more than one year that are available to offset
17liability, the earlier credit shall be applied first.
18    Nothing in this subsection (j) prohibits a private employer
19from providing an unpaid leave of absence to its employees for
20the purpose of serving as an organ donor or bone marrow donor;
21however, if the employer's policy provides for fewer than 30
22days of paid leave for organ or bone marrow donation, then the
23employer shall not be eligible for the credit under this
24Section.
25    As used in this subsection (j):
26        "Organ" means any biological tissue of the human body

 

 

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1    that may be donated by a living donor, including, but not
2    limited to, the kidney, liver, lung, pancreas, intestine,
3    bone, skin, or any subpart of those organs.
4        "Organ donor" means a person from whose body an organ
5    is taken to be transferred to the body of another person.
6        "Private employer" means a sole proprietorship,
7    corporation, partnership, limited liability company, or
8    other entity with one or more employees. "Private employer"
9    does not include a municipality, county, State agency, or
10    other public employer.
11    This subsection (j) is exempt from the provisions of
12Section 250 of this Act.
13(Source: P.A. 100-303, eff. 8-24-17; 100-511, eff. 9-18-17;
14100-863, eff. 8-14-18; 101-1, eff. 2-19-19.)
 
15    Section 99. Effective date. This Act takes effect on
16January 1, 2020.".