2023 Illinois Compiled Statutes › Chapter 35 - REVENUE › 35 ILCS 5/ - Illinois Income Tax Act. › Article 7 - Withholding Tax

(35 ILCS 5/Art. 7 heading)
ARTICLE 7.  
		WITHHOLDING TAX.
(35 ILCS 5/701) (from Ch. 120, par. 7-701)
Sec. 701. Requirement and amount of withholding.
(a) In General.  Every
employer maintaining an office or transacting business within this State
and required under the provisions of the Internal Revenue Code to
withhold a tax on:
(1) compensation paid in this State (as determined     under Section 304(a)(2)(B)) to an individual; or
(2) payments described in subsection (b) shall deduct     and withhold from such compensation for each payroll period (as defined in Section 3401 of the Internal Revenue Code) an amount equal to the amount by which such individual's compensation exceeds the proportionate part of this withholding exemption (computed as provided in Section 702) attributable to the payroll period for which such compensation is payable multiplied by a percentage equal to the percentage tax rate for individuals provided in subsection (b) of Section 201.
(a-5) Withholding from nonresident employees. For taxable years beginning on or after January 1, 2020, for purposes of determining compensation paid in this State under paragraph (B) of item (2) of subsection (a) of Section 304:
(1) If an employer maintains a time and attendance     system that tracks where employees perform services on a daily basis, then data from the time and attendance system shall be used. For purposes of this paragraph, time and attendance system means a system:
(A) in which the employee is required, on a         contemporaneous basis, to record the work location for every day worked outside of the State where the employment duties are primarily performed; and
(B) that is designed to allow the employer to         allocate the employee's wages for income tax purposes among all states in which the employee performs services.
(2) In all other cases, the employer shall obtain a     written statement from the employee of the number of days reasonably expected to be spent performing services in this State during the taxable year. Absent the employer's actual knowledge of fraud or gross negligence by the employee in making the determination or collusion between the employer and the employee to evade tax, the certification so made by the employee and maintained in the employer's books and records shall be prima facie evidence and constitute a rebuttable presumption of the number of days spent performing services in this State.
(b) Payment to Residents.  Any payment (including compensation, but not including a payment from which withholding is required under Section 710 of this Act) to a
resident
by a payor maintaining an office or transacting business within this State
(including any agency, officer, or employee of this State or of any political
subdivision of this State) and on which withholding of tax is required under
the provisions of the
Internal Revenue Code shall be deemed to be compensation paid in this State
by an employer to an employee for the purposes of Article 7 and Section
601(b)(1) to the extent such payment is included in the recipient's base
income and not subjected to withholding by another state.
Notwithstanding any other provision to the contrary, no amount shall be
withheld from unemployment insurance benefit payments made to an individual
pursuant to the Unemployment Insurance Act unless the individual has
voluntarily elected the withholding pursuant to rules promulgated by the
Director of Employment Security.
(c) Special Definitions.  Withholding shall be considered required under
the provisions of the Internal Revenue Code to the extent the Internal Revenue
Code either requires withholding or allows for voluntary withholding the
payor and recipient have entered into such a voluntary withholding agreement.
For the purposes of Article 7 and Section 1002(c) the term "employer" includes
any payor who is required to withhold tax pursuant to this Section.
(d) Reciprocal Exemption.  The Director may enter into an agreement with
the taxing authorities of any state which imposes a tax on or measured by
income to provide that compensation paid in such state to residents of this
State shall be exempt from withholding of such tax; in such case, any
compensation paid in this State to residents of such state shall be exempt
from withholding.
All reciprocal agreements shall be subject to the requirements of Section
2505-575 of the Department of Revenue Law (20 ILCS
2505/2505-575).
(e) Notwithstanding subsection (a)(2) of this Section, no withholding
is required on payments for which withholding is required under Section
3405 or 3406 of the Internal Revenue Code.
(Source: P.A. 101-585, eff. 8-26-19; 102-558, eff. 8-20-21.)
(35 ILCS 5/702) (from Ch. 120, par. 7-702)
Sec. 702. Amount Exempt from Withholding. For purposes of this Section
an employee shall be entitled to a withholding exemption in an amount equal
to the basic amount in Section 204(b) for each personal or
dependent exemption which he is
entitled to claim on his federal return pursuant to Section 151 of the
Internal Revenue Code; plus an allowance equal to $1,000 for each
$1,000 he is entitled to deduct from gross income in arriving at adjusted
gross income pursuant to Section 62 of the Internal Revenue Code;
plus an additional allowance equal to $1,000 for each $1,000 eligible for
subtraction on
his Illinois income tax return as Illinois real estate taxes paid during
the taxable year; or in any lesser amount claimed
by him. Every employee shall furnish to his employer such information as
is required for the employer to make an accurate withholding under this
Act. The employer may rely on this information for withholding purposes.
If any employee fails or refuses to furnish such information, the employer
shall withhold the full rate of tax from the employee's total compensation.
(Source: P.A. 97-507, eff. 8-23-11.)
(35 ILCS 5/703) (from Ch. 120, par. 7-703)
Sec. 703. Information statement. Every employer required to deduct and withhold tax under this Act from
compensation of an employee, or who would have been required so to deduct
and withhold tax if the employee's withholding exemption were not in excess
of the basic amount in Section 204(b), shall furnish in
duplicate to each such employee in respect of
the compensation paid by such employer to such employee during the calendar
year on or before January 31 of the succeeding year, or, if his employment
is terminated before the close of such calendar year, on the date on which
the last payment of compensation is made, a written statement in such form
as the Department may by regulation prescribe showing the amount of
compensation paid by the employer to the employee, the amount deducted and
withheld as tax, and such other information as the Department shall
prescribe. A copy of such statement shall be filed by the employee with his
return for his taxable year to which it relates (as determined under
Section 601(b)(1)).
(Source: P.A. 97-507, eff. 8-23-11.)
(35 ILCS 5/703A)
Sec. 703A. Information for reportable payment transactions.  Every person required under Section 6050W of the Internal Revenue Code to file federal Form 1099-K, Third-Party Payment Card and Third Party Network Transactions, identifying a reportable payment transaction to a payee with an Illinois address shall furnish a copy to the Department at such time and in such manner as the Department may prescribe. In addition, for reporting periods beginning on or after January 1, 2020, at the same time and in the same manner as the foregoing reportable payment transactions are required to be reported to the Department, the person shall report to the Department and to any payee with an Illinois address any information required by Section 6050W of the Internal Revenue Code with respect to third-party network transactions related to that payee, but without regard to the de minimis limitations of subsection (e) of Section 6050W of the Internal Revenue Code, if, in that reporting period, the amount of those transactions exceeds $1,000 and the aggregate number of those transactions exceeds 3. Failure to provide any information required by this Section shall incur a penalty for failure to file an information return as provided in Section 3-4 of the Uniform Penalty and Interest Act. The Department shall not share information gathered from Third Party Settlement Organizations with other federal, State, or local government entities.
(Source: P.A. 100-1171, eff. 1-4-19; 101-10, eff. 6-5-19.)
(35 ILCS 5/704) (from Ch. 120, par. 7-704)
Sec. 704. Employer's Return and Payment of Tax Withheld.
(a) In general, every employer who deducts and withholds or is required
to deduct and withhold tax under this Act prior to January 1, 2008, shall make such payments and
returns as provided in this Section.
(b) Quarter Monthly Payments:  Returns.  Every employer who deducts
and withholds or is required to deduct and withhold tax under this Act
shall, on or before the third  banking day following the close of a quarter
monthly period, pay to the Department or to a depositary designated by the
Department, pursuant to regulations prescribed by the Department, the taxes
so required to be deducted and withheld, whenever the aggregate amount
withheld by such employer (together with amounts previously withheld and
not paid to the Department) exceeds $1,000. For purposes of this Section,
Saturdays, Sundays, legal holidays and local bank holidays are not banking
days. A quarter monthly period, for purposes of this subsection, ends on
the 7th, 15th, 22nd and last day of each calendar month.  Every such
employer shall for each calendar quarter, on or before the last day of the
first month following the close of such quarter, and for the calendar year,
on or before January 31 of the succeeding calendar year, make a return with
respect to such taxes in such form and manner as the Department may by
regulations prescribe, and pay to the Department or to a depositary
designated by the Department all withheld taxes not previously paid to
the Department.
(c) Monthly Payments:  Returns.  Every employer required to deduct and
withhold tax under this Act shall, on or before the 15th day of the second
and third months of each calendar quarter, and on or before the last day of
the month following the last month of each such quarter, pay to the
Department or to a depositary designated by the Department, pursuant to
regulations prescribed by the Department, the taxes so required to be
deducted and withheld, whenever the aggregate amount withheld by such employer
(together with amounts previously withheld and not paid to the
Department) exceeds $500 but does not exceed $1,000.  Every such employer
shall for each calendar quarter, on or before the last day of the first
month following the close of such quarter, and for the calendar year, on or
before January 31 of the succeeding calendar year, make a return with
respect to such taxes in such form and manner as the Department may by
regulations prescribe, and pay to the Department or to a depositary
designated by the Department all withheld taxes not previously paid to
the Department.
(d) Annual Payments:  Returns.  Where the amount of compensation paid
by an employer is not sufficient to require the withholding of tax from the
compensation of any of its employees (or where the aggregate amount
withheld is less than $500), the Department may by regulation permit such
employer to file only an annual return and to pay the taxes required to be
deducted and withheld at the time of filing such annual return.
(e) Annual Return.  The Department may, as it deems appropriate, prescribe
by regulation for the filing of annual returns in lieu of quarterly returns
described in subsections (b) and (c).
(e-5) Annual Return and Payment.  On and after January 1, 1998,
notwithstanding subsections (b) through (d) of this Section, every employer who
deducts and withholds or is required to deduct and withhold tax from a person
engaged in domestic service employment, as that term is defined in Section 3510
of the Internal Revenue Code, may comply with the requirements of this Section
by filing an annual return and paying the taxes required to be deducted and
withheld on or before the 15th day of the fourth month following the close of
the employer's taxable year.  The annual return may be submitted with the
employer's individual income tax return.
(f) Magnetic Media Filing.  Forms W-2 that, pursuant to
the Internal Revenue Code and regulations promulgated thereunder, are
required to be submitted to the Internal Revenue Service on magnetic media,
must also be submitted to the Department on magnetic media for Illinois
purposes, if required by the Department.
(Source: P.A. 95-8, eff. 6-29-07.)
(35 ILCS 5/704A)
Sec. 704A. Employer's return and payment of tax withheld.
(a) In general, every employer who deducts and withholds or is required to deduct and withhold tax under this Act on or after January 1, 2008 shall make those payments and returns as provided in this Section.
(b) Returns.  Every employer shall, in the form and manner required by the Department, make returns with respect to taxes withheld or required to be withheld under this Article 7 for each quarter beginning on or after January 1, 2008, on or before the last day of the first month following the close of that quarter.
(c) Payments.  With respect to amounts withheld or required to be withheld on or after January 1, 2008:
(1) Semi-weekly payments. For each calendar year,     each employer who withheld or was required to withhold more than $12,000 during the one-year period ending on June 30 of the immediately preceding calendar year, payment must be made:
(A) on or before each Friday of the calendar         year, for taxes withheld or required to be withheld on the immediately preceding Saturday, Sunday, Monday, or Tuesday;
(B) on or before each Wednesday of the calendar         year, for taxes withheld or required to be withheld on the immediately preceding Wednesday, Thursday, or Friday.
Beginning with calendar year 2011, payments made     under this paragraph (1) of subsection (c) must be made by electronic funds transfer.
(2) Semi-weekly payments. Any employer who withholds     or is required to withhold more than $12,000 in any quarter of a calendar year is required to make payments on the dates set forth under item (1)  of this subsection (c) for each remaining quarter of that calendar year and for the subsequent calendar year.
(3) Monthly payments. Each employer, other than an     employer described in items (1) or (2) of this subsection, shall pay to the Department, on or before the 15th day of each month the taxes withheld or required to be withheld during the immediately preceding month.
(4) Payments with returns. Each employer shall pay to     the Department, on or before the due date for each return required to be filed under this Section, any tax withheld or required to be withheld during the period for which the return is due and not previously paid to the Department.
(d) Regulatory authority.  The Department may, by rule:
(1) Permit employers, in lieu of the requirements of     subsections (b) and (c), to file annual returns due on or before January 31 of the year for taxes withheld or required to be withheld during the previous calendar year and, if the aggregate amounts required to be withheld by the employer under this Article 7 (other than amounts required to be withheld under Section 709.5) do not exceed $1,000 for the previous calendar year, to pay the taxes required to be shown on each such return no later than the due date for such return.
(2) Provide that any payment required to be made     under subsection (c)(1) or (c)(2) is deemed to be timely to the extent paid by electronic funds transfer on or before the due date for deposit of federal income taxes withheld from, or federal employment taxes due with respect to, the wages from which the Illinois taxes were withheld.
(3) Designate one or more depositories to which     payment of taxes required to be withheld under this Article 7 must be paid by some or all employers.
(4) Increase the threshold dollar amounts at which     employers are required to make semi-weekly payments under subsection (c)(1) or (c)(2).
(e) Annual return and payment.  Every employer who deducts and withholds or is required to deduct and withhold tax from a person engaged in domestic service employment, as that term is defined in Section 3510 of the Internal Revenue Code, may comply with the requirements of this Section with respect to such employees by filing an annual return and paying the taxes required to be deducted and withheld on or before the 15th day of the fourth month following the close of the employer's taxable year. The Department may allow the employer's return to be submitted with the employer's individual income tax return or to be submitted with a return due from the employer under Section 1400.2 of the Unemployment Insurance Act.
(f) Magnetic media and electronic filing. With respect to taxes withheld in calendar years prior to 2017, any W-2 Form that, under the Internal Revenue Code and regulations promulgated thereunder, is required to be submitted to the Internal Revenue Service on magnetic media or electronically must also be submitted to the Department on magnetic media or electronically for Illinois purposes, if required by the Department.
With respect to taxes withheld in 2017 and subsequent calendar years, the Department may, by rule, require that any return (including any amended return) under this Section and any W-2 Form that is required to be submitted to the Department must be submitted on magnetic media or electronically.
The due date for submitting W-2 Forms shall be as prescribed by the Department by rule.
(g) For amounts deducted or withheld after December 31, 2009, a taxpayer who makes an election under subsection (f) of  Section 5-15 of the Economic Development for a Growing Economy Tax Credit Act for a taxable  year shall be allowed a credit against payments due under this Section for amounts withheld during the first calendar year beginning after the end of that taxable year equal to the amount of the credit for the incremental income tax attributable to full-time employees of the taxpayer awarded to the taxpayer by the Department of Commerce and Economic Opportunity under the Economic Development for a Growing Economy Tax Credit Act for the taxable year and credits not previously claimed and allowed to be carried forward under Section 211(4) of this Act as provided in subsection (f) of Section 5-15 of the Economic Development for a Growing Economy Tax Credit Act.  The credit or credits may not reduce the taxpayer's obligation for any payment due under this Section to less than zero.  If the amount of the credit or credits exceeds the total payments due under this Section with respect to amounts withheld during the calendar year, the excess may be carried forward and applied against the taxpayer's liability under this Section in the succeeding calendar years as allowed to be carried forward under paragraph (4) of Section 211 of this Act.  The credit or credits shall be applied to the earliest year for which there is a tax liability.  If there are credits from more than one taxable year that are available to offset a liability, the earlier credit shall be applied first.  Each employer who deducts and withholds or is required to deduct and withhold tax under this Act and who retains income tax withholdings under subsection (f) of Section 5-15 of the Economic Development for a Growing Economy Tax Credit Act must make a return with respect to such taxes and retained amounts in the form and manner that the Department, by rule, requires and pay to the Department or to a depositary designated by the Department those withheld taxes not retained by the taxpayer.   For purposes of this subsection (g), the term taxpayer shall include taxpayer and members of the taxpayer's unitary business group as defined under paragraph (27) of subsection (a) of Section 1501 of this Act. This Section is exempt from the provisions of Section 250 of this Act. No credit awarded under the Economic Development for a Growing Economy Tax Credit Act for agreements entered into on or after January 1, 2015 may be credited against payments due under this Section.
(g-1) For amounts deducted or withheld after December 31, 2024, a taxpayer who makes an election under the Reimagining Energy and Vehicles in Illinois Act shall be allowed a credit against payments due under this Section for amounts withheld during the first quarterly reporting period beginning after the certificate is issued equal to the portion of the REV Illinois Credit attributable to the incremental income tax attributable to new employees and retained employees as certified by the Department of Commerce and Economic Opportunity pursuant to an agreement with the taxpayer under the Reimagining Energy and Vehicles in Illinois Act for the taxable year. The credit or credits may not reduce the taxpayer's obligation for any payment due under this Section to less than zero. If the amount of the credit or credits exceeds the total payments due under this Section with respect to amounts withheld during the quarterly reporting period, the excess may be carried forward and applied against the taxpayer's liability under this Section in the succeeding quarterly reporting period as allowed to be carried forward under paragraph (4) of Section 211 of this Act. The credit or credits shall be applied to the earliest quarterly reporting period for which there is a tax liability. If there are credits from more than one quarterly reporting period that are available to offset a liability, the earlier credit shall be applied first. Each employer who deducts and withholds or is required to deduct and withhold tax under this Act and who retains income tax withholdings this subsection must make a return with respect to such taxes and retained amounts in the form and manner that the Department, by rule, requires and pay to the Department or to a depositary designated by the Department those withheld taxes not retained by the taxpayer. For purposes of this subsection (g-1), the term taxpayer shall include taxpayer and members of the taxpayer's unitary business group as defined under paragraph (27) of subsection (a) of Section 1501 of this Act. This Section is exempt from the provisions of Section 250 of this Act.
(g-2) For amounts deducted or withheld after December 31, 2024, a taxpayer who makes an election under the Manufacturing Illinois Chips for Real Opportunity (MICRO) Act shall be allowed a credit against payments due under this Section for amounts withheld during the first quarterly reporting period beginning after the certificate is issued equal to the portion of the MICRO Illinois Credit attributable to the incremental income tax attributable to new employees and retained employees as certified by the Department of Commerce and Economic Opportunity pursuant to an agreement with the taxpayer under the Manufacturing Illinois Chips for Real Opportunity (MICRO) Act for the taxable year. The credit or credits may not reduce the taxpayer's obligation for any payment due under this Section to less than zero. If the amount of the credit or credits exceeds the total payments due under this Section with respect to amounts withheld during the quarterly reporting period, the excess may be carried forward and applied against the taxpayer's liability under this Section in the succeeding quarterly reporting period as allowed to be carried forward under paragraph (4) of Section 211 of this Act. The credit or credits shall be applied to the earliest quarterly reporting period for which there is a tax liability. If there are credits from more than one quarterly reporting period that are available to offset a liability, the earlier credit shall be applied first. Each employer who deducts and withholds or is required to deduct and withhold tax under this Act and who retains income tax withholdings this subsection must make a return with respect to such taxes and retained amounts in the form and manner that the Department, by rule, requires and pay to the Department or to a depositary designated by the Department those withheld taxes not retained by the taxpayer. For purposes of this subsection, the term taxpayer shall include taxpayer and members of the taxpayer's unitary business group as defined under paragraph (27) of subsection (a) of Section 1501 of this Act. This Section is exempt from the provisions of Section 250 of this Act.
(h) An employer may claim a credit against payments due under this Section for amounts withheld during the first calendar year ending after the date on which a tax credit certificate was issued under Section 35 of the Small Business Job Creation  Tax Credit Act.  The credit shall be equal to the amount shown on the certificate, but may not reduce the taxpayer's obligation for any payment due under this Section to less than zero. If the amount of the credit exceeds the total payments due under this Section with respect to amounts withheld during the calendar year, the excess may be carried forward and applied against the taxpayer's liability under this Section in the 5 succeeding calendar years. The credit shall be applied to the earliest year for which there is a tax liability. If there are credits from more than one calendar year that are available to offset a liability, the earlier credit shall be applied first. This Section is exempt from the provisions of Section 250 of this Act.
(i) Each employer with 50 or fewer full-time equivalent employees during the reporting period may claim a credit against the payments due under this Section for each qualified employee in an amount equal to the maximum credit allowable. The credit may be taken against payments due for reporting periods that begin on or after January 1, 2020, and end on or before December 31, 2027. An employer may not claim a credit for an employee who has worked fewer than 90 consecutive days immediately preceding the reporting period; however, such credits may accrue during that 90-day period and be claimed against payments under this Section for future reporting periods after the employee has worked for the employer at least 90 consecutive days. In no event may the credit exceed the employer's liability for the reporting period. Each employer who deducts and withholds or is required to deduct and withhold tax under this Act and who retains income tax withholdings under this subsection must make a return with respect to such taxes and retained amounts in the form and manner that the Department, by rule, requires and pay to the Department or to a depositary designated by the Department those withheld taxes not retained by the employer.
For each reporting period, the employer may not claim a credit or credits for more employees than the number of employees making less than the minimum or reduced wage for the current calendar year during the last reporting period of the preceding calendar year. Notwithstanding any other provision of this subsection, an employer shall not be eligible for credits for a reporting period unless the average wage paid by the employer per employee for all employees making less than $55,000 during the reporting period is greater than the average wage paid by the employer per employee for all employees making less than $55,000 during the same reporting period of the prior calendar year.
For purposes of this subsection (i):
"Compensation paid in Illinois" has the meaning ascribed to that term under Section 304(a)(2)(B) of this Act.
"Employer" and "employee" have the meaning ascribed to those terms in the Minimum Wage Law, except that "employee" also includes employees who work for an employer with fewer than 4 employees. Employers that operate more than one establishment pursuant to a franchise agreement or that constitute members of a unitary business group shall aggregate their employees for purposes of determining eligibility for the credit.
"Full-time equivalent employees" means the ratio of the number of paid hours during the reporting period and the number of working hours in that period.
"Maximum credit" means the percentage listed below of the difference between the amount of compensation paid in Illinois to employees who are paid not more than the required minimum wage reduced by the amount of compensation paid in Illinois to employees who were paid less than the current required minimum wage during the reporting period prior to each increase in the required minimum wage on January 1. If an employer pays an employee more than the required minimum wage and that employee previously earned less than the required minimum wage, the employer may include the portion that does not exceed the required minimum wage as compensation paid in Illinois to employees who are paid not more than the required minimum wage.
(1) 25% for reporting periods beginning on or after     January 1, 2020 and ending on or before December 31, 2020;
(2) 21% for reporting periods beginning on or after     January 1, 2021 and ending on or before December 31, 2021;
(3) 17% for reporting periods beginning on or after     January 1, 2022 and ending on or before December 31, 2022;
(4) 13% for reporting periods beginning on or after     January 1, 2023 and ending on or before December 31, 2023;
(5) 9% for reporting periods beginning on or after     January 1, 2024 and ending on or before December 31, 2024;
(6) 5% for reporting periods beginning on or after     January 1, 2025 and ending on or before December 31, 2025.
The amount computed under this subsection may continue to be claimed for reporting periods beginning on or after January 1, 2026 and:
(A) ending on or before December 31, 2026 for     employers with more than 5 employees; or
(B) ending on or before December 31, 2027 for     employers with no more than 5 employees.
"Qualified employee" means an employee who is paid not more than the required minimum wage and has an average wage paid per hour by the employer during the reporting period equal to or greater than his or her average wage paid per hour by the employer during each reporting period for the immediately preceding 12 months. A new qualified employee is deemed to have earned the required minimum wage in the preceding reporting period.
"Reporting period" means the quarter for which a return is required to be filed under subsection (b) of this Section.
(j) For reporting periods beginning on or after January 1, 2023, if a private 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, then the private employer may take a credit against the payments due under this Section in an amount equal to the amount withheld under this Section with respect to wages paid while the employee is on organ donation leave, not to exceed $1,000 in withholdings for each employee who takes organ donation leave. To be eligible for the credit, 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. The private employer shall adopt rules governing organ donation leave, including rules that (i) establish conditions and procedures for requesting and approving leave and (ii) require medical documentation of the proposed organ or bone marrow donation before leave is approved by the private employer. A private employer must provide, in the manner required by the Department, documentation from the employee's medical provider, which the private employer receives from the employee, that verifies the employee's organ donation. The private employer must also provide, in the manner required by the Department, documentation that shows that a qualifying organ donor leave policy was in place and offered to all qualifying employees at the time the leave was taken. For the private employer to receive the tax credit, the employee taking organ donor leave must allow for the applicable medical records to be disclosed to the Department. If the private employer cannot provide the required documentation to the Department, then the private employer is ineligible for the credit under this Section. A private employer must also provide, in the form required by the Department, any additional documentation or information required by the Department to administer the credit under this Section. The credit under this subsection (j) shall be taken within one year after the date upon which the organ donation leave begins. If the leave taken spans into a second tax year, the employer qualifies for the allowable credit in the later of the 2 years. If the amount of credit exceeds the tax liability for the year, the excess may be carried and applied to the tax liability for the 3 taxable years following the excess credit year. The tax credit shall be applied to the earliest year for which there is a tax liability. If there are credits for more than one year that are available to offset liability, the earlier credit shall be applied first.
Nothing in this subsection (j) prohibits a private employer from providing an unpaid leave of absence to its employees for the purpose of serving as an organ donor or bone marrow donor; however, if the employer's policy provides for fewer than 30 days of paid leave for organ or bone marrow donation, then the employer shall not be eligible for the credit under this Section.
As used in this subsection (j):
"Organ" means any biological tissue of the human body that may be donated by a living donor, including, but not limited to, the kidney, liver, lung, pancreas, intestine, bone, skin, or any subpart of those organs.
"Organ donor" means a person from whose body an organ is taken to be transferred to the body of another person.
"Private employer" means a sole proprietorship, corporation, partnership, limited liability company, or other entity with one or more employees. "Private employer" does not include a municipality, county, State agency, or other public employer.
This subsection (j) is exempt from the provisions of Section 250 of this Act.
(Source: P.A. 101-1, eff. 2-19-19; 102-669, eff. 11-16-21; 102-700, Article 30, Section 30-5, eff. 4-19-22; 102-700, Article 110, Section 110-905, eff. 4-19-22; 102-1125, eff. 2-3-23.)
(35 ILCS 5/705) (from Ch. 120, par. 7-705)
Sec. 705. 
		Employer's Liability for Withheld Taxes. 
		Every employer who deducts and withholds or is required to deduct and withhold
tax under this Act is
liable for such tax. For purposes of assessment and collection, any amount withheld or
required to be withheld and paid over to the Department, and any penalties
and interest with respect thereto, shall be considered the tax of the
employer. Any amount of tax actually deducted and withheld under this Act
shall be held to be a special fund in trust for the Department. No employee
shall have any right of action against his employer in respect of any money
deducted and withheld from his wages and paid over to the Department in
compliance or in intended compliance with this Act.
(Source: P.A. 82-1009.)
(35 ILCS 5/706) (from Ch. 120, par. 7-706)
Sec. 706. 
		Employer's Failure to Withhold.
If an employer fails to deduct and withhold any amount of tax as
required under this Act, and thereafter the tax on account of which such
amount was required to be deducted and withheld is paid, such amount of tax
shall not be collected from the employer, but the employer shall not be
relieved from liability for penalties or interest otherwise applicable in
respect of such failure to deduct and withhold.
(Source: P.A. 76-261.)
(35 ILCS 5/707) (from Ch. 120, par. 7-707)
Sec. 707. 
		Governmental Employers.
If the employer is the United States, or a state, Territory, or
political subdivision thereof, or the District of Columbia, or any agency
or instrumentality of any one or more of the foregoing, the return of the
amount deducted and withheld upon any compensation may be made by any
officer or employee of the United States, or of such state, Territory, or
political subdivision, or of the District of Columbia, or of such agency or
instrumentality, as the case may be, having control of the payment of such
compensation, or appropriately designated for that purpose.
(Source: P.A. 76-261.)
(35 ILCS 5/709.5)
Sec. 709.5. Withholding by partnerships, Subchapter S corporations, and trusts.
(a) In general. For each taxable year ending on or after December 31, 2008, every partnership (other than a publicly traded partnership under Section 7704 of the Internal Revenue Code or investment partnership), Subchapter S corporation, and trust must withhold from each nonresident partner, shareholder, or beneficiary (other than a partner, shareholder, or beneficiary who is exempt from tax under Section 501(a) of the Internal Revenue Code or under Section 205 of this Act, who is included on a composite return filed by the partnership or Subchapter S corporation for the taxable year under subsection (f) of  Section 502 of this Act), or who is a retired partner, to the extent that partner's distributions are exempt from tax under Section 203(a)(2)(F) of this Act) an amount equal to the sum of (i) the share of business income of the partnership, Subchapter S corporation, or trust apportionable to Illinois plus (ii) for taxable years ending on or after December 31, 2014, the share of nonbusiness income of the partnership, Subchapter S corporation, or trust allocated to Illinois under Section 303 of this Act (other than an amount allocated to the commercial domicile of the taxpayer under Section 303 of this Act) that is distributable to that partner, shareholder, or beneficiary under Sections 702 and 704 and Subchapter S of the Internal Revenue Code, whether or not distributed, (iii) multiplied by the applicable rates of tax for that partner, shareholder, or beneficiary under subsections (a) through (d) of Section 201 of this Act, and (iv) net of the share of any credit under Article 2 of this Act that is distributable by the partnership, Subchapter S corporation, or trust and allowable against the tax liability of that partner, shareholder, or beneficiary for a taxable year ending on or after December 31, 2014.
(b) Credit for taxes withheld. Any amount withheld under subsection (a) of this Section and paid to the Department shall be treated as a payment of the estimated tax liability or of the liability for withholding under this Section of the partner, shareholder, or beneficiary to whom the income is distributable for the taxable year in which that person incurred a liability under this Act with respect to that income.
The Department shall adopt rules pursuant to which a partner, shareholder, or beneficiary may claim a credit against its obligation for withholding under this Section for amounts withheld under this Section with respect to income distributable to it by a partnership, Subchapter S corporation, or trust and allowing its partners, shareholders, or beneficiaries to claim a credit under this subsection (b) for those withheld amounts.
(c) Exemption from withholding.
(1) A partnership, Subchapter S corporation, or trust     shall not be required to withhold tax under subsection (a) of this Section with respect to any nonresident partner, shareholder, or beneficiary (other than an individual) from whom the partnership, S corporation, or trust has received a certificate, completed in the form and manner prescribed by the Department, stating that such nonresident partner, shareholder, or beneficiary shall:
(A) file all returns that the partner,         shareholder, or beneficiary is required to file under Section 502 of this Act and make timely payment of all taxes imposed under Section 201 of this Act or under this Section on the partner, shareholder, or beneficiary with respect to income of the partnership, S corporation, or trust; and
(B) be subject to personal jurisdiction in this         State for purposes of the collection of income taxes, together with related interest and penalties, imposed on the partner, shareholder, or beneficiary with respect to the income of the partnership, S corporation, or trust.
(2) The Department may revoke the exemption provided     by this subsection (c) at any time that it determines that the nonresident partner, shareholder, or beneficiary is not abiding by the terms of the certificate.  The Department shall notify the partnership, S corporation, or trust that it has revoked a certificate by notice left at the usual place of business of the partnership, S corporation, or trust or by mail to the last known address of the partnership, S corporation, or trust.
(3) A partnership, S corporation, or trust that     receives a certificate under this subsection (c) properly completed by a nonresident partner, shareholder, or beneficiary shall not be required to withhold any amount from that partner, shareholder, or beneficiary, the payment of which would be due under Section 711(a-5) of this Act after the receipt of the certificate and no earlier than 60 days after the Department has notified the partnership, S corporation, or trust that the certificate has been revoked.
(4) Certificates received by a partnership, S     corporation, or trust under this subsection (c) must be retained by the partnership, S corporation, or trust and a record of such certificates must be provided to the Department, in a format in which the record is available for review by the Department, upon request by the Department.  The Department may, by rule, require the record of certificates to be maintained and provided to the Department electronically.
(d) For taxable years ending on and after December 31, 2023, every investment partnership, as defined in Section 1501 of this Act, shall withhold from each nonresident partner (other than a partner who is exempt from tax under Section 501(a) of the Internal Revenue Code or under Section 205 of this Act, or who is a retired partner, to the extent that partner's distributions are exempt from tax under Section 203(a)(2)(F) of this Act) an amount calculated as follows:
(1) the sum of (i) the share of income that, but for     the provisions of subsection (c-5) of Section 305 of this Act, would be apportioned to Illinois by the investment partnership under subsection (a) of Section 305 of this Act and (ii) the share of nonbusiness income that, but for the provisions of subsection (c-5) of Section 305 of this Act, would be allocated to Illinois by the investment partnership under subsection (b) of Sections 305 and Section 303 of this Act (other than an amount allocated to the commercial domicile of the taxpayer under Section 303 of this Act) that is distributable to that partner under Sections 702 and 704 of the Internal Revenue Code, whether or not distributed; multiplied by
(2) the applicable rates of tax for that partner     under subsections (a) through (d) of Section 201 of this Act (except that, if the partner is a partnership or subchapter S corporation, the rate shall be equal to the rate imposed on individuals under subsection (b) of Section 201 of this Act); and
(3) net of the investment partnership's distributive     share of any credit under Article 2 of this Act that is distributable by the partnership and first allowable against the tax liability of that partner for a taxable year ending on or after December 31, 2023.
Except to the extent that the income of the investment partnership is business income in the hands of the partner under subsection (c-5) of Section 305 of this Act, no credit for taxes withheld shall be allowed under subsection (b) of this Section for amounts withheld under this subsection.
The provisions of subsection (c) of this Section, allowing for exemption from withholding, shall not apply for purposes of this subsection.
(Source: P.A. 103-9, eff. 6-7-23.)
(35 ILCS 5/710) (from Ch. 120, par. 7-710)
Sec. 710. Withholding from lottery, wagering, and gambling winnings.
(a)  In general.
(1) Any person making a payment to a resident or     nonresident of winnings under the Illinois Lottery Law and not required to withhold Illinois income tax from such payment under Subsection (b) of Section 701 of this Act because those winnings are not subject to Federal income tax withholding, must withhold Illinois income tax from such payment at a rate equal to the percentage tax rate for individuals provided in subsection (b) of Section 201, provided that withholding is not required if such payment of winnings is less than $1,000.
(2) In the case of an assignment of a lottery prize     under Section 13.1 of the Illinois Lottery Law, any person making a payment of the purchase price after December 31, 2013, shall withhold from the amount of each payment at a rate equal to the percentage tax rate for individuals provided in subsection (b) of Section 201.
(3) Any person making a payment after December 31,     2019 to a resident or nonresident of winnings from pari-mutuel wagering conducted at a wagering facility licensed under the Illinois Horse Racing Act of 1975 or from gambling games conducted on a riverboat or in a casino or organization gaming facility licensed under the Illinois Gambling Act must withhold Illinois income tax from such payment at a rate equal to the percentage tax rate for individuals provided in subsection (b) of Section 201, provided that the person making the payment is required to withhold under Section 3402(q) of the Internal Revenue Code.
(4) Any person making a payment after December 31,     2021 to a resident or nonresident of winnings from sports wagering conducted in accordance with the Sports Wagering Act must withhold Illinois income tax from such payment at a rate equal to the percentage tax rate for individuals provided in subsection (b) of Section 201, provided that the person making the payment is required to withhold under Section 3402(q) of the Internal Revenue Code.
(b) Credit for taxes withheld.  Any amount withheld under Subsection (a)
shall be a credit against the Illinois income tax liability of the person
to whom the payment of winnings was made for the taxable year in which that
person incurred an Illinois income tax liability with respect to those winnings.
(Source: P.A. 101-31, eff. 6-28-19; 102-40, eff. 6-25-21.)
(35 ILCS 5/711) (from Ch. 120, par. 7-711)
Sec. 711. Payor's Return and Payment of Tax Withheld.
(a) In general.  Every
payor required to deduct and withhold tax under Section 710 
shall be subject to the same reporting requirements regarding taxes
withheld and the same monthly and quarter monthly (weekly) payment requirements as
an employer subject to the provisions of Section 701.  For purposes of
monthly and quarter monthly (weekly) payments, the total tax withheld
under Sections 701 and 710 shall be considered in the
aggregate.
(a-5) Every partnership, Subchapter S corporation, or trust required to withhold tax under Section 709.5 shall report the amounts withheld and the partners, shareholders, or beneficiaries from whom the amounts were withheld, and pay over the amount withheld, no later than the due date (without regard to extensions) of the tax return of the partnership, Subchapter S corporation, or trust for the taxable year.
(b) Information statement.  Every payor required to deduct and withhold
tax under Section 710 
shall furnish in
duplicate to each party
entitled to the credit for such withholding under subsection (b) of Section 709.5, and subsection (b) of Section
710, respectively, on or before January 31 of the succeeding calendar
year for amounts withheld under Section 710 or the due date (without regard to extensions) of the return of the partnership, Subchapter S corporation, or trust for the taxable year for amounts withheld under Section 709.5 for the taxable year, a written statement
in such form as the Department may by regulation prescribe showing the amount
of the payments, the amount deducted and withheld as tax, and such other
information as the
Department may prescribe.  A copy of such statement shall be filed by the
party entitled to the credit for the withholding under subsection (b) of Section 709.5, or subsection (b) of Section
710 with his return for the taxable year to which it relates.
(Source: P.A. 95-233, eff. 8-16-07.)
(35 ILCS 5/712) (from Ch. 120, par. 7-712)
Sec. 712. Payor's Liability For Withheld Taxes. Every payor who deducts
and withholds or is required to deduct and withhold tax under Sections 709.5 or
						
710 is liable for such
tax.  For purposes of assessment and
collection, any amount withheld or required to be withheld and paid
over to the Department, and any penalties and interest
with respect thereto, shall be considered the tax of the payor.  Any amount
of tax actually deducted and withheld under Sections 709.5 or 710 shall
be held to be a special fund in trust for the Department.  No payee shall have
any right of action against his payor in respect of any money deducted and
withheld and paid over to the Department in compliance or in intended compliance
with Sections 709.5 or 710 (and until January 1, 1989, Sections 708 and 709).
(Source: P.A. 95-233, eff. 8-16-07.)
(35 ILCS 5/713) (from Ch. 120, par. 7-713)
Sec. 713. Payor's Failure To Withhold. If a payor fails to deduct and
withhold any amount of tax as required under Sections 709.5 or 710 and
thereafter the tax on account of which such amount was required to be deducted and
withheld is paid, such amount of tax shall not be collected from the payor,
but the payor shall not be relieved from liability for penalties or interest
otherwise applicable in respect of such failure to deduct and withhold.
For purposes of this Section, the tax on account of which an amount is required
to be deducted and withheld is the tax of the individual or individuals
who are entitled to a credit under subsection (b) of Section 709.5 or subsection (b) of Section 710 for the withheld tax.
(Source: P.A. 95-233, eff. 8-16-07.)