Bill Text: IL SB0068 | 2019-2020 | 101st General Assembly | Engrossed


Bill Title: Amends the Illinois Income Tax Act. Provides for a credit against withholding taxes in an amount equal to 25% of the wages or salary paid by a private employer to an Illinois employee while the employee is on organ donation leave if the employer grants all of its employees the option of taking a paid leave of absence of at least 30 days for the purpose of serving as an organ donor or bone marrow donor. Provides that the credit may not exceed $20,833.33 for each employee who takes organ donation leave. Provides that such a leave of absence must be taken without loss of pay, vacation time, compensatory time, personal days, or sick time for at least the first 30 days of the leave of absence. Effective immediately.

Spectrum: Slight Partisan Bill (Democrat 18-9)

Status: (Engrossed) 2019-05-15 - Added Alternate Co-Sponsor Rep. Celina Villanueva [SB0068 Detail]

Download: Illinois-2019-SB0068-Engrossed.html



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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.
18 (c) Payments. With respect to amounts withheld or required
19to be withheld on or after January 1, 2008:
20 (1) Semi-weekly payments. For each calendar year, each
21 employer who withheld or was required to withhold more than
22 $12,000 during the one-year period ending on June 30 of the
23 immediately preceding calendar year, payment must be made:

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

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

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1person engaged in domestic service employment, as that term is
2defined in Section 3510 of the Internal Revenue Code, may
3comply with the requirements of this Section with respect to
4such employees by filing an annual return and paying the taxes
5required to be deducted and withheld on or before the 15th day
6of the fourth month following the close of the employer's
7taxable year. The Department may allow the employer's return to
8be submitted with the employer's individual income tax return
9or to be submitted with a return due from the employer under
10Section 1400.2 of the Unemployment Insurance Act.
11 (f) Magnetic media and electronic filing. With respect to
12taxes withheld in calendar years prior to 2017, any W-2 Form
13that, under the Internal Revenue Code and regulations
14promulgated thereunder, is required to be submitted to the
15Internal Revenue Service on magnetic media or electronically
16must also be submitted to the Department on magnetic media or
17electronically for Illinois purposes, if required by the
18Department.
19 With respect to taxes withheld in 2017 and subsequent
20calendar years, the Department may, by rule, require that any
21return (including any amended return) under this Section and
22any W-2 Form that is required to be submitted to the Department
23must be submitted on magnetic media or electronically.
24 The due date for submitting W-2 Forms shall be as
25prescribed by the Department by rule.
26 (g) For amounts deducted or withheld after December 31,

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12009, a taxpayer who makes an election under subsection (f) of
2Section 5-15 of the Economic Development for a Growing Economy
3Tax Credit Act for a taxable year shall be allowed a credit
4against payments due under this Section for amounts withheld
5during the first calendar year beginning after the end of that
6taxable year equal to the amount of the credit for the
7incremental income tax attributable to full-time employees of
8the taxpayer awarded to the taxpayer by the Department of
9Commerce and Economic Opportunity under the Economic
10Development for a Growing Economy Tax Credit Act for the
11taxable year and credits not previously claimed and allowed to
12be carried forward under Section 211(4) of this Act as provided
13in subsection (f) of Section 5-15 of the Economic Development
14for a Growing Economy Tax Credit Act. The credit or credits may
15not reduce the taxpayer's obligation for any payment due under
16this Section to less than zero. If the amount of the credit or
17credits exceeds the total payments due under this Section with
18respect to amounts withheld during the calendar year, the
19excess may be carried forward and applied against the
20taxpayer's liability under this Section in the succeeding
21calendar years as allowed to be carried forward under paragraph
22(4) of Section 211 of this Act. The credit or credits shall be
23applied to the earliest year for which there is a tax
24liability. If there are credits from more than one taxable year
25that are available to offset a liability, the earlier credit
26shall be applied first. Each employer who deducts and withholds

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1or is required to deduct and withhold tax under this Act and
2who retains income tax withholdings under subsection (f) of
3Section 5-15 of the Economic Development for a Growing Economy
4Tax Credit Act must make a return with respect to such taxes
5and retained amounts in the form and manner that the
6Department, by rule, requires and pay to the Department or to a
7depositary designated by the Department those withheld taxes
8not retained by the taxpayer. For purposes of this subsection
9(g), the term taxpayer shall include taxpayer and members of
10the taxpayer's unitary business group as defined under
11paragraph (27) of subsection (a) of Section 1501 of this Act.
12This Section is exempt from the provisions of Section 250 of
13this Act. No credit awarded under the Economic Development for
14a Growing Economy Tax Credit Act for agreements entered into on
15or after January 1, 2015 may be credited against payments due
16under this Section.
17 (h) An employer may claim a credit against payments due
18under this Section for amounts withheld during the first
19calendar year ending after the date on which a tax credit
20certificate was issued under Section 35 of the Small Business
21Job Creation Tax Credit Act. The credit shall be equal to the
22amount shown on the certificate, but may not reduce the
23taxpayer's obligation for any payment due under this Section to
24less than zero. If the amount of the credit exceeds the total
25payments due under this Section with respect to amounts
26withheld during the calendar year, the excess may be carried

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1forward and applied against the taxpayer's liability under this
2Section in the 5 succeeding calendar years. The credit shall be
3applied to the earliest year for which there is a tax
4liability. If there are credits from more than one calendar
5year that are available to offset a liability, the earlier
6credit shall be applied first. This Section is exempt from the
7provisions of Section 250 of this Act.
8 (i) Each employer with 50 or fewer full-time equivalent
9employees during the reporting period may claim a credit
10against the payments due under this Section for each qualified
11employee in an amount equal to the maximum credit allowable.
12The credit may be taken against payments due for reporting
13periods that begin on or after January 1, 2020, and end on or
14before December 31, 2027. An employer may not claim a credit
15for an employee who has worked fewer than 90 consecutive days
16immediately preceding the reporting period; however, such
17credits may accrue during that 90-day period and be claimed
18against payments under this Section for future reporting
19periods after the employee has worked for the employer at least
2090 consecutive days. In no event may the credit exceed the
21employer's liability for the reporting period. Each employer
22who deducts and withholds or is required to deduct and withhold
23tax under this Act and who retains income tax withholdings
24under this subsection must make a return with respect to such
25taxes and retained amounts in the form and manner that the
26Department, by rule, requires and pay to the Department or to a

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

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1number of paid hours during the reporting period and the number
2of working hours in that period.
3 "Maximum credit" means the percentage listed below of the
4difference between the amount of compensation paid in Illinois
5to employees who are paid not more than the required minimum
6wage reduced by the amount of compensation paid in Illinois to
7employees who were paid less than the current required minimum
8wage during the reporting period prior to each increase in the
9required minimum wage on January 1. If an employer pays an
10employee more than the required minimum wage and that employee
11previously earned less than the required minimum wage, the
12employer may include the portion that does not exceed the
13required minimum wage as compensation paid in Illinois to
14employees who are paid not more than the required minimum wage.
15 (1) 25% for reporting periods beginning on or after
16 January 1, 2020 and ending on or before December 31, 2020;
17 (2) 21% for reporting periods beginning on or after
18 January 1, 2021 and ending on or before December 31, 2021;
19 (3) 17% for reporting periods beginning on or after
20 January 1, 2022 and ending on or before December 31, 2022;
21 (4) 13% for reporting periods beginning on or after
22 January 1, 2023 and ending on or before December 31, 2023;
23 (5) 9% for reporting periods beginning on or after
24 January 1, 2024 and ending on or before December 31, 2024;
25 (6) 5% for reporting periods beginning on or after
26 January 1, 2025 and ending on or before December 31, 2025.

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1 The amount computed under this subsection may continue to
2be claimed for reporting periods beginning on or after January
31, 2026 and:
4 (A) ending on or before December 31, 2026 for employers
5 with more than 5 employees; or
6 (B) ending on or before December 31, 2027 for employers
7 with no more than 5 employees.
8 "Qualified employee" means an employee who is paid not more
9than the required minimum wage and has an average wage paid per
10hour by the employer during the reporting period equal to or
11greater than his or her average wage paid per hour by the
12employer during each reporting period for the immediately
13preceding 12 months. A new qualified employee is deemed to have
14earned the required minimum wage in the preceding reporting
15period.
16 "Reporting period" means the quarter for which a return is
17required to be filed under subsection (b) of this Section.
18 (j) For reporting periods beginning on or after January 1,
192020, if a private employer grants all of its employees the
20option of taking a paid leave of absence of at least 30 days
21for the purpose of serving as an organ donor or bone marrow
22donor, then the private employer may take a credit against the
23payments due under this Section in an amount equal to the
24amount withheld under this Section with respect to wages paid
25while the employee is on organ donation leave, not to exceed
26$1,000 in withholdings for each employee who takes organ

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1donation leave. To be eligible for the credit, such a leave of
2absence must be taken without loss of pay, vacation time,
3compensatory time, personal days, or sick time for at least the
4first 30 days of the leave of absence. The private employer
5shall adopt rules governing organ donation leave, including
6rules that (i) establish conditions and procedures for
7requesting and approving leave and (ii) require medical
8documentation of the proposed organ or bone marrow donation
9before leave is approved by the private employer. A private
10employer must provide, in the manner required by the
11Department, documentation from the employee's medical
12provider, which the private employer receives from the
13employee, that verifies the employee's organ donation. The
14private employer must also provide, in the manner required by
15the Department, documentation that shows that a qualifying
16organ donor leave policy was in place and offered to all
17qualifying employees at the time the leave was taken. For the
18private employer to receive the tax credit, the employee taking
19organ donor leave must allow for the applicable medical records
20to be disclosed to the Department. If the private employer
21cannot provide the required documentation to the Department,
22then the private employer is ineligible for the credit under
23this Section. A private employer must also provide, in the form
24required by the Department, any additional documentation or
25information required by the Department to administer the credit
26under this Section. The credit under this subsection (j) shall

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1be taken within one year after the date upon which the organ
2donation leave begins. If the leave taken spans into a second
3tax year, the employer qualifies for the allowable credit in
4the later of the 2 years. If the amount of credit exceeds the
5tax liability for the year, the excess may be carried and
6applied to the tax liability for the 3 taxable years following
7the excess credit year. The tax credit shall be applied to the
8earliest year for which there is a tax liability. If there are
9credits for more than one year that are available to offset
10liability, the earlier credit shall be applied first.
11 Nothing in this subsection (j) prohibits a private employer
12from providing an unpaid leave of absence to its employees for
13the purpose of serving as an organ donor or bone marrow donor;
14however, if the employer's policy provides for fewer than 30
15days of paid leave for organ or bone marrow donation, then the
16employer shall not be eligible for the credit under this
17Section.
18 As used in this subsection (j):
19 "Organ" means any biological tissue of the human body
20 that may be donated by a living donor, including, but not
21 limited to, the kidney, liver, lung, pancreas, intestine,
22 bone, skin, or any subpart of those organs.
23 "Organ donor" means a person from whose body an organ
24 is taken to be transferred to the body of another person.
25 "Private employer" means a sole proprietorship,
26 corporation, partnership, limited liability company, or

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1 other entity with one or more employees. "Private employer"
2 does not include a municipality, county, State agency, or
3 other public employer.
4 This subsection (j) is exempt from the provisions of
5Section 250 of this Act.
6(Source: P.A. 100-303, eff. 8-24-17; 100-511, eff. 9-18-17;
7100-863, eff. 8-14-18; 101-1, eff. 2-19-19.)
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