Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart S - REQUIREMENT AND AMOUNT OF WITHHOLDING › Section 100.7050 - Computation of Amount Withheld (IITA Section 702)

Current through Register Vol. 48, No. 28, July 12, 2024
a) Amount Withheld. Every employer required
				to deduct and withhold a tax on compensation paid in Illinois to an individual
				shall deduct and withhold for each payroll period an amount equal to the tax
				rate in effect for the date the compensation is paid times the amount by which
				that individual's compensation exceeds the proportionate part of his or her
				withholding exemption attributable to the payroll period for which that
				compensation is payable. "Payroll period" for Illinois withholding purposes
				shall have the same definition as in
				26
				USC 3401 and shall include "miscellaneous
				payroll period" as that term is defined and used in that section and the
				regulations thereunder.
b) Methods
				of Computations
1) General Rules. Employers
				required to withhold Illinois income tax on compensation paid in this State
				shall compute the amount of tax to be withheld for each payroll period pursuant
				to the methods and rules provided for withholding on that compensation under
				the Internal Revenue Code.
2)
				Direct Percentage Computations
A) An employer
				may elect a direct percentage computation to determine the amount of
				withholding utilizing the following allowances per claimed exemption (see
				Section 100.7150 ) for the appropriate payroll period. A tax rate in effect for
				the date the compensation is paid is to be used in the determination of the
				amount of tax to be withheld. For compensation paid in years prior to 1998, the
				exemption is:
Weekly
$ 19.23
Bi-Weekly
38.46
Semi-monthly
41.67
Monthly
83.33
Quarterly
250.00
Semi-annually
500.00
Annually
1,000.00
Daily or Miscellaneous
2.74
For years after 1997, the basic amount of the exemption is
				  changed from $1,000. For those years, the amount of an exemption allocable to a
				  period of less than a year should be taken from the applicable version of
				  Booklet IL-700-T, Illinois Withholding Tax Tables, available from the
				  Department. If the Booklet IL-700-T is not available, these amounts can be
				  computed by multiplying the above amounts by a fraction equal to the amount of
				  exemption allowed for the year divided by $1,000.
B) The steps in computing the amount to be
				withheld under the percentage method of withholding are as follows:
i) Step 1: Determine the amount of one
				withholding exemption for the particular payroll period from the preceding
				table;
ii) Step 2: Multiply the
				amount determined in Step 1 by the number of exemptions claimed by the
				employee;
iii) Step 3: Subtract the
				amount determined in Step 2 from the employee's compensation;
iv) Step 4: Multiply the difference
				determined in Step 3 by the tax rate in effect for the date the compensation is
				paid. The result is the amount of tax to be withheld for the particular payroll
				period.
C) If an
				employee has claimed no withholding exemptions, either by filing a withholding
				exemption certificate claiming zero exemptions or by not filing a withholding
				exemption certificate, the amount to be withheld is the tax rate in effect for
				the date the compensation is paid times the compensation payable for each
				payroll period.
3)
				Tables. An employer may elect to use the withholding tables set out in the
				Booklet IL-700-T, Illinois Withholding Tax Tables, available from the
				Department.
4) Other Methods
A) An employer may use any other method for
				computing the amount of tax to be deducted and withheld for each payroll period
				that is permitted for withholding for federal income tax purposes.
B) If the method for the computation of the
				amount of tax to be deducted and withheld for federal income tax purposes
				required prior approval of the Commissioner of Internal Revenue, then the
				Department shall be notified of that federal approval by the submission of a
				copy of the employer's request and the Commissioner's approval.