Illinois General Assembly - Full Text of HB0186
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Full Text of HB0186  102nd General Assembly

HB0186ham002 102ND GENERAL ASSEMBLY

Rep. Maurice A. West, II

Filed: 2/3/2022

 

 


 

 


 
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1
AMENDMENT TO HOUSE BILL 186

2    AMENDMENT NO. ______. Amend House Bill 186 by replacing
3everything after the enacting clause with the following:
 
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
9or is 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

 

 

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1that quarter.
2    (c) Payments. With respect to amounts withheld or required
3to be withheld on or after January 1, 2008:
4        (1) Semi-weekly payments. For each calendar year, each
5    employer who withheld or was required to withhold more
6    than $12,000 during the one-year period ending on June 30
7    of the immediately preceding calendar year, payment must
8    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
22    quarter of a calendar year is required to make payments on
23    the dates set forth under item (1) of this subsection (c)
24    for each remaining quarter of that calendar year and for
25    the 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
25    from, or federal employment taxes due with respect to, the
26    wages from which the Illinois taxes were withheld.

 

 

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1        (3) Designate one or more depositories to which
2    payment of taxes required to be withheld under this
3    Article 7 must 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
16to be submitted with the employer's individual income tax
17return or to be submitted with a return due from the employer
18under Section 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
21provided in subsection (f) of Section 5-15 of the Economic
22Development for a Growing Economy Tax Credit Act. The credit
23or credits may not reduce the taxpayer's obligation for any
24payment due under this Section to less than zero. If the amount
25of the credit or credits exceeds the total payments due under
26this Section with respect to amounts withheld during the

 

 

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1calendar year, the excess may be carried forward and applied
2against the taxpayer's liability under this Section in the
3succeeding calendar years as allowed to be carried forward
4under paragraph (4) of Section 211 of this Act. The credit or
5credits shall be applied to the earliest year for which there
6is a tax liability. If there are credits from more than one
7taxable year that are available to offset a liability, the
8earlier credit shall be applied first. Each employer who
9deducts and withholds or is required to deduct and withhold
10tax under this Act and who retains income tax withholdings
11under subsection (f) of Section 5-15 of the Economic
12Development for a Growing Economy Tax Credit Act must make a
13return with respect to such taxes and retained amounts in the
14form and manner that the Department, by rule, requires and pay
15to the Department or to a depositary designated by the
16Department those withheld taxes not retained by the taxpayer.
17For purposes of this subsection (g), the term taxpayer shall
18include taxpayer and members of the taxpayer's unitary
19business group as defined under paragraph (27) of subsection
20(a) of Section 1501 of this Act. This Section is exempt from
21the provisions of Section 250 of this Act. No credit awarded
22under the Economic Development for a Growing Economy Tax
23Credit Act for agreements entered into on or after January 1,
242015 may be credited against payments due under this Section.
25    (g-1) For amounts deducted or withheld after December 31,
262024, a taxpayer who makes an election under the Reimagining

 

 

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1Electric Vehicles in Illinois Act shall be allowed a credit
2against payments due under this Section for amounts withheld
3during the first quarterly reporting period beginning after
4the certificate is issued equal to the portion of the REV
5Illinois Credit attributable to the incremental income tax
6attributable to new employees and retained employees as
7certified by the Department of Commerce and Economic
8Opportunity pursuant to an agreement with the taxpayer under
9the Reimagining Electric Vehicles in Illinois Act for the
10taxable year. The credit or credits may not reduce the
11taxpayer's obligation for any payment due under this Section
12to less than zero. If the amount of the credit or credits
13exceeds the total payments due under this Section with respect
14to amounts withheld during the quarterly reporting period, the
15excess may be carried forward and applied against the
16taxpayer's liability under this Section in the succeeding
17quarterly reporting period as allowed to be carried forward
18under paragraph (4) of Section 211 of this Act. The credit or
19credits shall be applied to the earliest quarterly reporting
20period for which there is a tax liability. If there are credits
21from more than one quarterly reporting period that are
22available to offset a liability, the earlier credit shall be
23applied first. Each employer who deducts and withholds or is
24required to deduct and withhold tax under this Act and who
25retains income tax withholdings this subsection must make a
26return with respect to such taxes and retained amounts in the

 

 

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1form and manner that the Department, by rule, requires and pay
2to the Department or to a depositary designated by the
3Department those withheld taxes not retained by the taxpayer.
4For purposes of this subsection (g-1), the term taxpayer shall
5include taxpayer and members of the taxpayer's unitary
6business group as defined under paragraph (27) of subsection
7(a) of Section 1501 of this Act. This Section is exempt from
8the provisions of Section 250 of this Act.
9    (h) An employer may claim a credit against payments due
10under this Section for amounts withheld during the first
11calendar year ending after the date on which a tax credit
12certificate was issued under Section 35 of the Small Business
13Job Creation Tax Credit Act. The credit shall be equal to the
14amount shown on the certificate, but may not reduce the
15taxpayer's obligation for any payment due under this Section
16to less than zero. If the amount of the credit exceeds the
17total payments due under this Section with respect to amounts
18withheld during the calendar year, the excess may be carried
19forward and applied against the taxpayer's liability under
20this Section in the 5 succeeding calendar years. The credit
21shall be applied to the earliest year for which there is a tax
22liability. If there are credits from more than one calendar
23year that are available to offset a liability, the earlier
24credit shall be applied first. This Section is exempt from the
25provisions of Section 250 of this Act.
26    (i) Each employer with 50 or fewer full-time equivalent

 

 

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1employees during the reporting period may claim a credit
2against the payments due under this Section for each qualified
3employee in an amount equal to the maximum credit allowable.
4The credit may be taken against payments due for reporting
5periods that begin on or after January 1, 2020, and end on or
6before December 31, 2027. An employer may not claim a credit
7for an employee who has worked fewer than 90 consecutive days
8immediately preceding the reporting period; however, such
9credits may accrue during that 90-day period and be claimed
10against payments under this Section for future reporting
11periods after the employee has worked for the employer at
12least 90 consecutive days. In no event may the credit exceed
13the employer's liability for the reporting period. Each
14employer who deducts and withholds or is required to deduct
15and withhold tax under this Act and who retains income tax
16withholdings under this subsection must make a return with
17respect to such taxes and retained amounts in the form and
18manner that the Department, by rule, requires and pay to the
19Department or to a depositary designated by the Department
20those withheld taxes not retained by the employer.
21    For each reporting period, the employer may not claim a
22credit or credits for more employees than the number of
23employees making less than the minimum or reduced wage for the
24current calendar year during the last reporting period of the
25preceding calendar year. Notwithstanding any other provision
26of this subsection, an employer shall not be eligible for

 

 

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1credits for a reporting period unless the average wage paid by
2the employer per employee for all employees making less than
3$55,000 during the reporting period is greater than the
4average wage paid by the employer per employee for all
5employees making less than $55,000 during the same reporting
6period of the prior calendar year.
7    For purposes of this subsection (i):
8    "Compensation paid in Illinois" has the meaning ascribed
9to that term under Section 304(a)(2)(B) of this Act.
10    "Employer" and "employee" have the meaning ascribed to
11those terms in the Minimum Wage Law, except that "employee"
12also includes employees who work for an employer with fewer
13than 4 employees. Employers that operate more than one
14establishment pursuant to a franchise agreement or that
15constitute members of a unitary business group shall aggregate
16their employees for purposes of determining eligibility for
17the credit.
18    "Full-time equivalent employees" means the ratio of the
19number of paid hours during the reporting period and the
20number of working hours in that period.
21    "Maximum credit" means the percentage listed below of the
22difference between the amount of compensation paid in Illinois
23to employees who are paid not more than the required minimum
24wage reduced by the amount of compensation paid in Illinois to
25employees who were paid less than the current required minimum
26wage during the reporting period prior to each increase in the

 

 

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1required minimum wage on January 1. If an employer pays an
2employee more than the required minimum wage and that employee
3previously earned less than the required minimum wage, the
4employer may include the portion that does not exceed the
5required minimum wage as compensation paid in Illinois to
6employees who are paid not more than the required minimum
7wage.
8        (1) 25% for reporting periods beginning on or after
9    January 1, 2020 and ending on or before December 31, 2020;
10        (2) 21% for reporting periods beginning on or after
11    January 1, 2021 and ending on or before December 31, 2021;
12        (3) 17% for reporting periods beginning on or after
13    January 1, 2022 and ending on or before December 31, 2022;
14        (4) 13% for reporting periods beginning on or after
15    January 1, 2023 and ending on or before December 31, 2023;
16        (5) 9% for reporting periods beginning on or after
17    January 1, 2024 and ending on or before December 31, 2024;
18        (6) 5% for reporting periods beginning on or after
19    January 1, 2025 and ending on or before December 31, 2025.
20    The amount computed under this subsection may continue to
21be claimed for reporting periods beginning on or after January
221, 2026 and:
23        (A) ending on or before December 31, 2026 for
24    employers with more than 5 employees; or
25        (B) ending on or before December 31, 2027 for
26    employers with no more than 5 employees.

 

 

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1    "Qualified employee" means an employee who is paid not
2more than the required minimum wage and has an average wage
3paid per hour by the employer during the reporting period
4equal to or greater than his or her average wage paid per hour
5by the employer during each reporting period for the
6immediately preceding 12 months. A new qualified employee is
7deemed to have earned the required minimum wage in the
8preceding reporting period.
9    "Reporting period" means the quarter for which a return is
10required to be filed under subsection (b) of this Section.
11    (j) Each employer with 250 or fewer full-time equivalent
12employees during the reporting period may claim a credit
13against the payments due under this Section for each qualified
14employee in an amount equal to the credit amount. The credit
15may be taken against payments due for reporting periods that
16begin on or after January 1, 2023 and end on or before December
1731, 2032. Credits for a particular qualified employee may be
18taken during the tax year in which the credit was earned. An
19employer may not claim a credit for an employee who has worked
20fewer than 180 consecutive days immediately preceding the
21first day of the first pay period during which the raise is in
22effect. In no event may the credit exceed the employer's
23liability for the reporting period. Each employer who deducts
24and withholds or is required to deduct and withhold tax under
25this Act and who retains income tax withholdings under this
26subsection must make a return with respect to such taxes and

 

 

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1retained amounts in the form and manner that the Department,
2by rule, requires and pay to the Department or to a depositary
3designated by the Department those withheld taxes not retained
4by the employer.
5    Notwithstanding any other provision of this subsection, an
6employer is not eligible for credits under this subsection for
7a reporting period unless the average wage paid by the
8employer per employee for all employees making less than
9$52,000 during the reporting period is greater than the
10average wage paid by the employer per employee for all
11employees making less than $52,000 during the same reporting
12period of the prior calendar year.
13    For purposes of this subsection (j):
14    "Base period" means the employer's reporting period that
15immediately precedes the reporting period in which the
16qualified employee's raise takes effect.
17    "Compensation paid in Illinois" has the meaning ascribed
18to that term under paragraph (B) of item (2) of subsection (a)
19of Section 304 of this Act.
20    "Credit amount" means the amount listed below:
21        (1) 25% of the difference between the amount of
22    compensation paid in Illinois by the employer to the
23    qualified employee in the base period and the portion of
24    the compensation paid in Illinois by the employer to the
25    qualified employee in the reporting period for which the
26    credit is taken that does not exceed $37,400 when

 

 

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1    annualized; plus
2        (2) 20% of the compensation paid in Illinois by the
3    employer to the qualified employee in the reporting period
4    for which the credit is taken that exceeds the greater of
5    (i) the amount of compensation paid in Illinois by the
6    employer to the qualified employee in the base period or
7    (ii) $37,400 when annualized but does not exceed $41,600
8    when annualized; plus
9        (3) 15% of the compensation paid in Illinois by the
10    employer to the qualified employee in the reporting period
11    for which the credit is taken that exceeds the greater of
12    (i) the amount of compensation paid in Illinois by the
13    employer to the qualified employee in the base period or
14    (ii) $41,600 when annualized but does not exceed $52,000
15    when annualized.
16    "Employer" and "employee" have the meanings ascribed to
17those terms in the Minimum Wage Law, except that "employee"
18also includes employees who work for an employer with fewer
19than 4 employees. Employers that operate more than one
20establishment pursuant to a franchise agreement or that
21constitute members of a unitary business group shall aggregate
22their employees for purposes of determining eligibility for
23the credit.
24    "Full-time equivalent employees" means the ratio of the
25number of paid hours during the reporting period and the
26number of working hours in that period.

 

 

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1    "Qualified employee" means an employee who receives a
2raise from an employer, whose post-raise annual salary
3attributable to that employer is not less than $31,200, and
4who continues to be employed by the employer during the
5reporting period for which the credit is taken.
6    "Raise" means a permanent increase in an employee's hourly
7pay or salary that does not result in reduced hours or reduced
8benefits and is not a temporary bonus.
9    "Reporting period" means the quarter for which a return is
10required to be filed under subsection (b) of this Section.
11(Source: P.A. 101-1, eff. 2-19-19; 102-669, eff. 11-16-21.)".