Illinois discusses withholding income tax changes for 2017

The Illinois Department of Revenue has issued an informational bulletin that discusses personal income tax withholding changes for the 2017 tax year for employers, payroll service providers, software developers, and those that pay gambling and lottery winnings. Effective January 1, 2017, all withholding taxpayers will be assigned to pay withholding income tax on a monthly or semi-weekly schedule. In addition, all withholding taxpayers will be required to file quarterly returns on Form IL-941. The annual filing and payment option will no longer be available. The Department will notify taxpayers that are currently annual payers of their assignment to either a monthly or a semi-weekly payment schedule for 2017.

Form IL-941 is due by the last day of the month following the end of the quarter and must include all Illinois income tax withheld during the corresponding three months. If the due date falls on a holiday or weekend, the return is due on the next business day. Payment due dates are determined by the payment schedule assigned to the withholding taxpayer based on the taxpayer’s liability, and the day employees are paid or tax is withheld from others. 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 previous Wednesday, Thursday, or Friday, and by Friday for amounts withheld on the previous Saturday, Sunday, Monday, or Tuesday. Taxpayers that withhold over $12,000 in a quarter must submit payments electronically on a semi-weekly basis from that point forward.

Form IL-941 has been updated for the 2017 tax year, including a line to verify compliance with the Illinois Secure Choice Savings Program Act, a section for entering required withholding information for each month of the quarter, and entry lines for the amount of income tax withheld based on payroll dates. A new line has been added for preparers to enter their IRS preparer tax identification number (PTIN). Beginning on or after January 1, 2017, all paid income tax return preparers must include their PTIN on any tax returns they prepare and file or on any refund claim. Failure to comply may result in assessment of a penalty on the preparer. (Informational Bulletin FY 2017-07, Illinois Department of Revenue, September 26, 2016.)

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