Full Text of HB0024 97th General Assembly
HB0024 97TH GENERAL ASSEMBLY |
| | 97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012 HB0024 Introduced 1/12/2011, by Rep. Jim Sacia SYNOPSIS AS INTRODUCED: |
| 35 ILCS 5/803 | from Ch. 120, par. 8-803 | 35 ILCS 5/804 | from Ch. 120, par. 8-804 |
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Amends the Illinois Income Tax Act. In a Section concerning estimated taxes, provides that, if (i) the taxpayer is owed a refund from the State based upon an income tax overpayment by the taxpayer, (ii) the taxpayer previously filed with the Department a valid amended Illinois income tax return claiming a refund for the overpayment, (iii) at least 30 days have elapsed between the date the taxpayer filed the amended return and the date the estimated tax installment is due, and (iv) the tax refund due to the taxpayer is larger than the estimated tax installment due, then the taxpayer may elect to reduce the amount of any unpaid refund owed to the taxpayer by the amount of the estimated tax due. Provides that the election must be approved by the Department and must be made in the form and manner prescribed by the Department. Exempts the offset amounts from certain penalty provisions. Effective immediately.
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| 1 | | AN ACT concerning revenue.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois Income Tax Act is amended by | 5 | | changing Sections 803 and 804 as follows:
| 6 | | (35 ILCS 5/803) (from Ch. 120, par. 8-803)
| 7 | | Sec. 803. Payment of Estimated Tax.
| 8 | | (a) Every taxpayer other than an
estate, trust, | 9 | | partnership, Subchapter S corporation or farmer is required
to | 10 | | pay estimated tax for the taxable year, in such amount and with | 11 | | such
forms as the Department shall prescribe, if the amount | 12 | | payable as estimated
tax can reasonably be expected to be more | 13 | | than (i) $250 for taxable years
ending before December 31, 2001 | 14 | | and $500 for taxable years ending on or
after December 31, 2001 | 15 | | or (ii) $400 for
corporations.
| 16 | | (b) Estimated tax defined. The term "estimated tax" means | 17 | | the excess of:
| 18 | | (1) The amount which the taxpayer estimates to be his | 19 | | tax under this Act
for the taxable year, over
| 20 | | (2) The amount which he estimates to be the sum of any | 21 | | amounts to be
withheld on account of or credited against | 22 | | such tax.
| 23 | | (c) Joint payment. If they are eligible to do so for |
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| 1 | | federal tax
purposes, a husband and wife may pay estimated tax | 2 | | as if they were one
taxpayer, in which case the liability with | 3 | | respect to the estimated tax
shall be joint and several. If a | 4 | | joint payment is made but the husband and
wife elect to | 5 | | determine their taxes under this Act separately, the
estimated | 6 | | tax for such year may be treated as the estimated tax of either
| 7 | | husband or wife, or may be divided between them, as they may | 8 | | elect.
| 9 | | (d) There shall be paid 4 equal installments of estimated | 10 | | tax for
each taxable year, payable as follows:
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11 | | Required Installment: |
Due Date: |
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12 | | 1st |
April 15 |
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13 | | 2nd |
June 15 |
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14 | | 3rd |
September 15 |
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15 | | 4th |
Individuals: January 15 of the |
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16 | | |
following taxable year |
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17 | | |
Corporations: December 15 |
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18 | | (e) Farmers. An individual, having gross income from | 19 | | farming for the
taxable year which is at least 2/3 of his total | 20 | | estimated gross income for such year.
| 21 | | (f) Application to short taxable years. The application of | 22 | | this
section to taxable years of less than 12 months shall be | 23 | | in accordance with
regulations prescribed by the Department.
| 24 | | (g) Fiscal years. In the application of this section to the | 25 | | case of a
taxable year beginning on any date other than January | 26 | | 1, there shall be
substituted, for the months specified in |
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| 1 | | subsections (d) and
(e), the
months which correspond thereto.
| 2 | | (h) Installments paid in advance. Any installment of | 3 | | estimated
tax may be paid before the date prescribed for its | 4 | | payment.
| 5 | | The changes in this Section made by this amendatory Act of | 6 | | 1985 shall
apply to taxable years ending on or after January 1, | 7 | | 1986.
| 8 | | (i) Beginning with the first installment due on or after | 9 | | the effective date of this amendatory Act of the 97th General | 10 | | Assembly, if (i) the taxpayer is owed a refund from the State | 11 | | based upon an income tax overpayment by the taxpayer, (ii) the | 12 | | taxpayer previously filed with the Department a valid amended | 13 | | Illinois income tax return claiming a refund for the | 14 | | overpayment, (iii) at least 30 days have elapsed between the | 15 | | date the taxpayer filed the amended return and the date the | 16 | | estimated tax installment is due, and (iv) the tax refund due | 17 | | to the taxpayer is larger than the estimated tax installment | 18 | | due, then the taxpayer may elect to reduce the amount of any | 19 | | unpaid refund owed to the taxpayer by the amount of the | 20 | | estimated tax due. Such an election must be approved by the | 21 | | Department and must be made in the form and manner prescribed | 22 | | by the Department. | 23 | | (Source: P.A. 91-913, eff. 1-1-01.)
| 24 | | (35 ILCS 5/804) (from Ch. 120, par. 8-804)
| 25 | | Sec. 804. Failure to Pay Estimated Tax.
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| 1 | | (a) In general. In case of any underpayment of estimated | 2 | | tax by a
taxpayer, except as provided in subsection (d) or (e), | 3 | | the taxpayer shall
be liable to a penalty in an amount | 4 | | determined at the rate prescribed by
Section 3-3 of the Uniform | 5 | | Penalty and Interest Act upon the amount of the
underpayment | 6 | | (determined under subsection (b)) for each required | 7 | | installment.
| 8 | | (b) Amount of underpayment. For purposes of subsection (a), | 9 | | the
amount of the underpayment shall be the excess of:
| 10 | | (1) the amount of the installment which would be | 11 | | required to be paid
under subsection (c), over
| 12 | | (2) the amount, if any, of the installment paid on or | 13 | | before the
last date prescribed for payment.
| 14 | | (c) Amount of Required Installments.
| 15 | | (1) Amount.
| 16 | | (A) In General. Except as provided in paragraph | 17 | | (2), the amount of any
required installment shall be | 18 | | 25% of the required annual payment.
| 19 | | (B) Required Annual Payment. For purposes of | 20 | | subparagraph (A),
the term "required annual payment" | 21 | | means the lesser of
| 22 | | (i) 90% of the tax shown on the return for the | 23 | | taxable year, or
if no return is filed, 90% of the | 24 | | tax for such year, or
| 25 | | (ii) 100% of the tax shown on the return of the | 26 | | taxpayer for the
preceding taxable year if a return |
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| 1 | | showing a liability for tax was filed by
the | 2 | | taxpayer for the preceding taxable year and such | 3 | | preceding year was a
taxable year of 12 months.
| 4 | | (2) Lower Required Installment where Annualized Income | 5 | | Installment is Less
Than Amount Determined Under Paragraph | 6 | | (1).
| 7 | | (A) In General. In the case of any required | 8 | | installment if a taxpayer
establishes that the | 9 | | annualized income installment is less than the amount
| 10 | | determined under paragraph (1),
| 11 | | (i) the amount of such required installment | 12 | | shall be the annualized
income installment, and
| 13 | | (ii) any reduction in a required installment | 14 | | resulting from the
application of this | 15 | | subparagraph shall be recaptured by increasing the
| 16 | | amount of the next required installment determined | 17 | | under paragraph (1) by
the amount of such | 18 | | reduction, and by increasing subsequent required
| 19 | | installments to the extent that the reduction has | 20 | | not previously been
recaptured under this clause.
| 21 | | (B) Determination of Annualized Income | 22 | | Installment. In the case of
any required installment, | 23 | | the annualized income installment is the
excess, if | 24 | | any, of
| 25 | | (i) an amount equal to the applicable | 26 | | percentage of the tax for the
taxable year computed |
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| 1 | | by placing on an annualized basis the net income | 2 | | for
months in the taxable year ending before the | 3 | | due date for the installment, over
| 4 | | (ii) the aggregate amount of any prior | 5 | | required installments for
the taxable year.
| 6 | | (C) Applicable Percentage.
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7 | | In the case of the following |
The applicable |
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8 | | required installments: |
percentage is: |
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9 | | 1st ............................... |
22.5% |
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10 | | 2nd ............................... |
45% |
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11 | | 3rd ............................... |
67.5% |
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12 | | 4th ............................... |
90% |
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13 | | (D) Annualized Net Income; Individuals. For | 14 | | individuals, net
income shall be placed on an | 15 | | annualized basis by:
| 16 | | (i) multiplying by 12, or in the case of a | 17 | | taxable year of
less than 12 months, by the number | 18 | | of months in the taxable year, the
net income | 19 | | computed without regard to the standard exemption | 20 | | for the months
in the taxable
year ending before | 21 | | the month in which the installment is required to | 22 | | be paid;
| 23 | | (ii) dividing the resulting amount by the | 24 | | number of months in the
taxable year ending before | 25 | | the month in which such installment date falls; and
| 26 | | (iii) deducting from such amount the standard |
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| 1 | | exemption allowable for
the taxable year, such | 2 | | standard exemption being determined as of the last
| 3 | | date prescribed for payment of the installment.
| 4 | | (E) Annualized Net Income; Corporations. For | 5 | | corporations,
net income shall be placed on an | 6 | | annualized basis by multiplying
by 12 the taxable | 7 | | income
| 8 | | (i) for the first 3 months of the taxable year, | 9 | | in the case of the
installment required to be paid | 10 | | in the 4th month,
| 11 | | (ii) for the first 3 months or for the first 5 | 12 | | months of the taxable
year, in the case of the | 13 | | installment required to be paid in the 6th month,
| 14 | | (iii) for the first 6 months or for the first 8 | 15 | | months of the taxable
year, in the case of the | 16 | | installment required to be paid in the 9th month, | 17 | | and
| 18 | | (iv) for the first 9 months or for the first 11 | 19 | | months of the taxable
year, in the case of the | 20 | | installment required to be paid in the 12th month
| 21 | | of the taxable year,
| 22 | | then dividing the resulting amount by the number of | 23 | | months in the taxable
year (3, 5, 6, 8, 9, or 11 as the | 24 | | case may be).
| 25 | | (d) Exceptions. Notwithstanding the provisions of the | 26 | | preceding
subsections, the penalty imposed by subsection (a) |
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| 1 | | shall not
be imposed if the taxpayer was not required to file | 2 | | an Illinois income
tax return for the preceding taxable year, | 3 | | or, for individuals, if the
taxpayer had no tax liability for | 4 | | the preceding taxable year and such year
was a taxable year of | 5 | | 12 months.
The penalty imposed by subsection (a) shall
also not | 6 | | be imposed on any underpayments of estimated tax due before the
| 7 | | effective date of this amendatory Act of 1998 which | 8 | | underpayments are solely
attributable to the change in | 9 | | apportionment from subsection (a) to subsection
(h) of Section | 10 | | 304. The penalty imposed by subsection (a) shall
also not be | 11 | | imposed with respect to any amounts the taxpayer is eligible to | 12 | | deduct from his or her tax refund pursuant to subsection (i) of | 13 | | Section 803 of this Act. The provisions of this amendatory Act | 14 | | of 1998 apply to tax
years ending on or after December 31, | 15 | | 1998.
| 16 | | (e) The penalty imposed for underpayment of estimated tax | 17 | | by subsection
(a) of this Section shall not be imposed to the | 18 | | extent that the Director
or his or her designate determines, | 19 | | pursuant to Section 3-8 of the Uniform Penalty
and Interest Act | 20 | | that the penalty should not be imposed.
| 21 | | (f) Definition of tax. For purposes of subsections (b) and | 22 | | (c),
the term "tax" means the excess of the tax imposed under | 23 | | Article 2 of
this Act, over the amounts credited against such | 24 | | tax under Sections
601(b) (3) and (4).
| 25 | | (g) Application of Section in case of tax withheld under | 26 | | Article 7.
For purposes of applying this Section:
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| 1 | | (1) in the case of an individual, tax
withheld from | 2 | | compensation for the taxable year shall be deemed a payment
| 3 | | of estimated tax, and an equal part of such amount shall be | 4 | | deemed paid
on each installment date for such taxable year, | 5 | | unless the taxpayer
establishes the dates on which all | 6 | | amounts were actually withheld, in
which case the amounts | 7 | | so withheld shall be deemed payments of estimated
tax on | 8 | | the dates on which such amounts were actually withheld;
| 9 | | (2) amounts timely paid by a partnership, Subchapter S | 10 | | corporation, or trust on behalf of a partner, shareholder, | 11 | | or beneficiary pursuant to subsection (f) of Section 502 or | 12 | | Section 709.5 and claimed as a payment of estimated tax | 13 | | shall be deemed a payment of estimated tax made on the last | 14 | | day of the taxable year of the partnership, Subchapter S | 15 | | corporation, or trust for which the income from the | 16 | | withholding is made was computed; and | 17 | | (3) all other amounts pursuant to Article 7 shall be | 18 | | deemed a payment of estimated tax on the date the payment | 19 | | is made to the taxpayer of the amount from which the tax is | 20 | | withheld.
| 21 | | (g-5) Amounts withheld under the State Salary and Annuity | 22 | | Withholding
Act. An individual who has amounts withheld under | 23 | | paragraph (10) of Section 4
of the State Salary and Annuity | 24 | | Withholding Act may elect to have those amounts
treated as | 25 | | payments of estimated tax made on the dates on which those | 26 | | amounts
are actually withheld.
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| 1 | | (i) Short taxable year. The application of this Section to
| 2 | | taxable years of less than 12 months shall be in accordance | 3 | | with
regulations prescribed by the Department.
| 4 | | The changes in this Section made by Public Act 84-127 shall | 5 | | apply to
taxable years ending on or after January 1, 1986.
| 6 | | (Source: P.A. 95-233, eff. 8-16-07.)
| 7 | | Section 99. Effective date. This Act takes effect upon | 8 | | becoming law.
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