Bill Text: IL SB0068 | 2019-2020 | 101st General Assembly | Engrossed
Bill Title: Makes changes to update the statutory base. Reinserts the provisions of the bill as amended by Senate Amendment No. 2, but provides that the credit may not exceed $1,000 in withholdings for each employee (in Senate Amendment No. 2, $20,833.33). Provides that the credit applies for reporting periods beginning on or after January 1, 2020. Effective immediately.
Spectrum: Slight Partisan Bill (Democrat 18-9)
Status: (Failed) 2021-01-13 - Session Sine Die [SB0068 Detail]
Download: Illinois-2019-SB0068-Engrossed.html
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1 | AN ACT concerning revenue.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Illinois Income Tax Act is amended by | ||||||
5 | changing Section 704A as follows:
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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 | ||||||
9 | is required to deduct and withhold tax under this Act on or | ||||||
10 | after January 1, 2008 shall make those payments and returns as | ||||||
11 | provided in this Section. | ||||||
12 | (b) Returns. Every employer shall, in the form and manner | ||||||
13 | required by the Department, make returns with respect to taxes | ||||||
14 | withheld or required to be withheld under this Article 7 for | ||||||
15 | each quarter beginning on or after January 1, 2008, on or | ||||||
16 | before the last day of the first month following the close of | ||||||
17 | that quarter. | ||||||
18 | (c) Payments. With respect to amounts withheld or required | ||||||
19 | to 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.
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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 | ||||||
26 | and withholds or is required to deduct and withhold tax from a |
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1 | person engaged in domestic service employment, as that term is | ||||||
2 | defined in Section 3510 of the Internal Revenue Code, may | ||||||
3 | comply with the requirements of this Section with respect to | ||||||
4 | such employees by filing an annual return and paying the taxes | ||||||
5 | required to be deducted and withheld on or before the 15th day | ||||||
6 | of the fourth month following the close of the employer's | ||||||
7 | taxable year. The Department may allow the employer's return to | ||||||
8 | be submitted with the employer's individual income tax return | ||||||
9 | or to be submitted with a return due from the employer under | ||||||
10 | Section 1400.2 of the Unemployment Insurance Act. | ||||||
11 | (f) Magnetic media and electronic filing. With respect to | ||||||
12 | taxes withheld in calendar years prior to 2017, any W-2 Form | ||||||
13 | that, under the Internal Revenue Code and regulations | ||||||
14 | promulgated thereunder, is required to be submitted to the | ||||||
15 | Internal Revenue Service on magnetic media or electronically | ||||||
16 | must also be submitted to the Department on magnetic media or | ||||||
17 | electronically for Illinois purposes, if required by the | ||||||
18 | Department. | ||||||
19 | With respect to taxes withheld in 2017 and subsequent | ||||||
20 | calendar years, the Department may, by rule, require that any | ||||||
21 | return (including any amended return) under this Section and | ||||||
22 | any W-2 Form that is required to be submitted to the Department | ||||||
23 | must be submitted on magnetic media or electronically. | ||||||
24 | The due date for submitting W-2 Forms shall be as | ||||||
25 | prescribed by the Department by rule. | ||||||
26 | (g) For amounts deducted or withheld after December 31, |
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1 | 2009, a taxpayer who makes an election under subsection (f) of | ||||||
2 | Section 5-15 of the Economic Development for a Growing Economy | ||||||
3 | Tax Credit Act for a taxable year shall be allowed a credit | ||||||
4 | against payments due under this Section for amounts withheld | ||||||
5 | during the first calendar year beginning after the end of that | ||||||
6 | taxable year equal to the amount of the credit for the | ||||||
7 | incremental income tax attributable to full-time employees of | ||||||
8 | the taxpayer awarded to the taxpayer by the Department of | ||||||
9 | Commerce and Economic Opportunity under the Economic | ||||||
10 | Development for a Growing Economy Tax Credit Act for the | ||||||
11 | taxable year and credits not previously claimed and allowed to | ||||||
12 | be carried forward under Section 211(4) of this Act as provided | ||||||
13 | in subsection (f) of Section 5-15 of the Economic Development | ||||||
14 | for a Growing Economy Tax Credit Act. The credit or credits may | ||||||
15 | not reduce the taxpayer's obligation for any payment due under | ||||||
16 | this Section to less than zero. If the amount of the credit or | ||||||
17 | credits exceeds the total payments due under this Section with | ||||||
18 | respect to amounts withheld during the calendar year, the | ||||||
19 | excess may be carried forward and applied against the | ||||||
20 | taxpayer's liability under this Section in the succeeding | ||||||
21 | calendar years as allowed to be carried forward under paragraph | ||||||
22 | (4) of Section 211 of this Act. The credit or credits shall be | ||||||
23 | applied to the earliest year for which there is a tax | ||||||
24 | liability. If there are credits from more than one taxable year | ||||||
25 | that are available to offset a liability, the earlier credit | ||||||
26 | shall be applied first. Each employer who deducts and withholds |
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1 | or is required to deduct and withhold tax under this Act and | ||||||
2 | who retains income tax withholdings under subsection (f) of | ||||||
3 | Section 5-15 of the Economic Development for a Growing Economy | ||||||
4 | Tax Credit Act must make a return with respect to such taxes | ||||||
5 | and retained amounts in the form and manner that the | ||||||
6 | Department, by rule, requires and pay to the Department or to a | ||||||
7 | depositary designated by the Department those withheld taxes | ||||||
8 | not retained by the taxpayer. For purposes of this subsection | ||||||
9 | (g), the term taxpayer shall include taxpayer and members of | ||||||
10 | the taxpayer's unitary business group as defined under | ||||||
11 | paragraph (27) of subsection (a) of Section 1501 of this Act. | ||||||
12 | This Section is exempt from the provisions of Section 250 of | ||||||
13 | this Act. No credit awarded under the Economic Development for | ||||||
14 | a Growing Economy Tax Credit Act for agreements entered into on | ||||||
15 | or after January 1, 2015 may be credited against payments due | ||||||
16 | under this Section. | ||||||
17 | (h) An employer may claim a credit against payments due | ||||||
18 | under this Section for amounts withheld during the first | ||||||
19 | calendar year ending after the date on which a tax credit | ||||||
20 | certificate was issued under Section 35 of the Small Business | ||||||
21 | Job Creation Tax Credit Act. The credit shall be equal to the | ||||||
22 | amount shown on the certificate, but may not reduce the | ||||||
23 | taxpayer's obligation for any payment due under this Section to | ||||||
24 | less than zero. If the amount of the credit exceeds the total | ||||||
25 | payments due under this Section with respect to amounts | ||||||
26 | withheld during the calendar year, the excess may be carried |
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1 | forward and applied against the taxpayer's liability under this | ||||||
2 | Section in the 5 succeeding calendar years. The credit shall be | ||||||
3 | applied to the earliest year for which there is a tax | ||||||
4 | liability. If there are credits from more than one calendar | ||||||
5 | year that are available to offset a liability, the earlier | ||||||
6 | credit shall be applied first. This Section is exempt from the | ||||||
7 | provisions of Section 250 of this Act. | ||||||
8 | (i) Each employer with 50 or fewer full-time equivalent | ||||||
9 | employees during the reporting period may claim a credit | ||||||
10 | against the payments due under this Section for each qualified | ||||||
11 | employee in an amount equal to the maximum credit allowable. | ||||||
12 | The credit may be taken against payments due for reporting | ||||||
13 | periods that begin on or after January 1, 2020, and end on or | ||||||
14 | before December 31, 2027. An employer may not claim a credit | ||||||
15 | for an employee who has worked fewer than 90 consecutive days | ||||||
16 | immediately preceding the reporting period; however, such | ||||||
17 | credits may accrue during that 90-day period and be claimed | ||||||
18 | against payments under this Section for future reporting | ||||||
19 | periods after the employee has worked for the employer at least | ||||||
20 | 90 consecutive days. In no event may the credit exceed the | ||||||
21 | employer's liability for the reporting period. Each employer | ||||||
22 | who deducts and withholds or is required to deduct and withhold | ||||||
23 | tax under this Act and who retains income tax withholdings | ||||||
24 | under this subsection must make a return with respect to such | ||||||
25 | taxes and retained amounts in the form and manner that the | ||||||
26 | Department, by rule, requires and pay to the Department or to a |
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1 | depositary designated by the Department those withheld taxes | ||||||
2 | not retained by the employer. | ||||||
3 | For each reporting period, the employer may not claim a | ||||||
4 | credit or credits for more employees than the number of | ||||||
5 | employees making less than the minimum or reduced wage for the | ||||||
6 | current calendar year during the last reporting period of the | ||||||
7 | preceding calendar year. Notwithstanding any other provision | ||||||
8 | of this subsection, an employer shall not be eligible for | ||||||
9 | credits for a reporting period unless the average wage paid by | ||||||
10 | the employer per employee for all employees making less than | ||||||
11 | $55,000 during the reporting period is greater than the average | ||||||
12 | wage paid by the employer per employee for all employees making | ||||||
13 | less than $55,000 during the same reporting period of the prior | ||||||
14 | calendar year. | ||||||
15 | For purposes of this subsection (i): | ||||||
16 | "Compensation paid in Illinois" has the meaning ascribed to | ||||||
17 | that term under Section 304(a)(2)(B) of this Act. | ||||||
18 | "Employer" and "employee" have the meaning ascribed to | ||||||
19 | those terms in the Minimum Wage Law, except that "employee" | ||||||
20 | also includes employees who work for an employer with fewer | ||||||
21 | than 4 employees. Employers that operate more than one | ||||||
22 | establishment pursuant to a franchise agreement or that | ||||||
23 | constitute members of a unitary business group shall aggregate | ||||||
24 | their employees for purposes of determining eligibility for the | ||||||
25 | credit. | ||||||
26 | "Full-time equivalent employees" means the ratio of the |
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1 | number of paid hours during the reporting period and the number | ||||||
2 | of working hours in that period. | ||||||
3 | "Maximum credit" means the percentage listed below of the | ||||||
4 | difference between the amount of compensation paid in Illinois | ||||||
5 | to employees who are paid not more than the required minimum | ||||||
6 | wage reduced by the amount of compensation paid in Illinois to | ||||||
7 | employees who were paid less than the current required minimum | ||||||
8 | wage during the reporting period prior to each increase in the | ||||||
9 | required minimum wage on January 1. If an employer pays an | ||||||
10 | employee more than the required minimum wage and that employee | ||||||
11 | previously earned less than the required minimum wage, the | ||||||
12 | employer may include the portion that does not exceed the | ||||||
13 | required minimum wage as compensation paid in Illinois to | ||||||
14 | employees 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 | ||||||
2 | be claimed for reporting periods beginning on or after January | ||||||
3 | 1, 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 | ||||||
9 | than the required minimum wage and has an average wage paid per | ||||||
10 | hour by the employer during the reporting period equal to or | ||||||
11 | greater than his or her average wage paid per hour by the | ||||||
12 | employer during each reporting period for the immediately | ||||||
13 | preceding 12 months. A new qualified employee is deemed to have | ||||||
14 | earned the required minimum wage in the preceding reporting | ||||||
15 | period. | ||||||
16 | "Reporting period" means the quarter for which a return is | ||||||
17 | required to be filed under subsection (b) of this Section. | ||||||
18 | (j) For reporting periods beginning on or after January 1, | ||||||
19 | 2020, if a private employer grants all of its employees the | ||||||
20 | option of taking a paid leave of absence of at least 30 days | ||||||
21 | for the purpose of serving as an organ donor or bone marrow | ||||||
22 | donor, then the private employer may take a credit against the | ||||||
23 | payments due under this Section in an amount equal to the | ||||||
24 | amount withheld under this Section with respect to wages paid | ||||||
25 | while 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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1 | donation leave. To be eligible for the credit, such a leave of | ||||||
2 | absence must be taken without loss of pay, vacation time,
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3 | compensatory time, personal days, or sick time for at least the | ||||||
4 | first 30 days of the leave of absence. The private employer | ||||||
5 | shall adopt rules governing organ donation leave, including | ||||||
6 | rules that (i) establish conditions and procedures for | ||||||
7 | requesting and approving leave and (ii) require medical | ||||||
8 | documentation of the proposed organ or bone marrow donation | ||||||
9 | before leave is approved by the private employer. A private | ||||||
10 | employer must provide, in the manner required by the | ||||||
11 | Department, documentation from the employee's medical | ||||||
12 | provider, which the private employer receives from the | ||||||
13 | employee, that verifies the employee's organ donation. The | ||||||
14 | private employer must also provide, in the manner required by | ||||||
15 | the Department, documentation that shows that a qualifying | ||||||
16 | organ donor leave policy was in place and offered to all | ||||||
17 | qualifying employees at the time the leave was taken. For the | ||||||
18 | private employer to receive the tax credit, the employee taking | ||||||
19 | organ donor leave must allow for the applicable medical records | ||||||
20 | to be disclosed to the Department. If the private employer | ||||||
21 | cannot provide the required documentation to the Department, | ||||||
22 | then the private employer is ineligible for the credit under | ||||||
23 | this Section. A private employer must also provide, in the form | ||||||
24 | required by the Department, any additional documentation or | ||||||
25 | information required by the Department to administer the credit | ||||||
26 | under this Section. The credit under this subsection (j) shall |
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1 | be taken within one year after the date upon which the organ | ||||||
2 | donation leave begins. If the leave taken spans into a second | ||||||
3 | tax year, the employer qualifies for the allowable credit in | ||||||
4 | the later of the 2 years. If the amount of credit exceeds the | ||||||
5 | tax liability for the year, the excess may be carried and | ||||||
6 | applied to the tax liability for the 3 taxable years following | ||||||
7 | the excess credit year. The tax credit shall be applied to the | ||||||
8 | earliest year for which there is a tax liability. If there are | ||||||
9 | credits for more than one year that are available to offset | ||||||
10 | liability, the earlier credit shall be applied first. | ||||||
11 | Nothing in this subsection (j) prohibits a private employer | ||||||
12 | from providing an unpaid leave of absence to its employees for | ||||||
13 | the purpose of serving as an organ donor or bone marrow donor; | ||||||
14 | however, if the employer's policy provides for fewer than 30 | ||||||
15 | days of paid leave for organ or bone marrow donation, then the | ||||||
16 | employer shall not be eligible for the credit under this | ||||||
17 | Section. | ||||||
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 | ||||||
5 | Section 250 of this Act. | ||||||
6 | (Source: P.A. 100-303, eff. 8-24-17; 100-511, eff. 9-18-17; | ||||||
7 | 100-863, eff. 8-14-18; 101-1, eff. 2-19-19.)
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