Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart S - REQUIREMENT AND AMOUNT OF WITHHOLDING › Section 100.7060 - Additional Withholding (IITA Section 701)

Current through Register Vol. 48, No. 28, July 12, 2024
a) General rule. If an employee has other
				income subject to the Illinois income tax in addition to compensation subject
				to withholding, he may wish to increase his withholding in order to avoid the
				necessity of being required to file a declaration of estimated tax. (See IITA
				Section 801 and the regulations thereunder.) In addition to the tax required to
				be deducted and withheld in accordance with IITA Section 701, an employer and
				employee may agree that an additional amount shall be withheld from the
				employee's wages.
b) Written
				agreement required. The agreement to withhold an additional amount shall be in
				writing and shall be in such form as the employer may prescribe. The agreement
				shall be effective for such period as the employer and employee mutually agree
				upon. However, unless the agreement provides for an earlier termination, either
				the employer or the employee, by furnishing a written notice to the other, may
				terminate the agreement effective with respect to the first payment of wages
				made on or after the first status determination date (January 1 and July 1 of
				each year) which occurs at least 30 days after the date on which such notice is
				furnished.
c) Liability for
				additional withholding. The amount deducted and withheld pursuant to an
				agreement between the employer and the employee shall be considered as tax
				required to be deducted and withheld under IITA Section 701. All provisions of
				the Act and regulations applicable with respect to the tax required to be
				deducted and withheld under Article 7 shall be applicable with respect to any
				amount deducted and withheld pursuant to the agreement.
d) Examples. 86 Ill. Adm. Code
				100.7060
				may be illustrated by the following examples:
1) Example 1: Taxpayer B, a resident of
				Illinois, earns a salary of $20,000. He also receives income of $10,000 from
				his chicken farm in Texas and $8,000 from a gold mine in Alaska. The income
				from the chicken farm and the gold mine is taxable in Illinois since B is an
				Illinois resident. If B so desires, he may request his employer to withhold
				that amount for each payroll period which, for the entire taxable year, would
				reasonably be expected to approximate his total Illinois income tax liability
				for that year and would obviate the necessity of having to file an estimated
				tax declaration.
2) Example 2: A
				and B, husband and wife, are residents of Illinois and file a joint return. A
				is employed by F Company, a foreign corporation, and works at F's office
				located in State X for an annual wage of $15,000. F is not required to deduct
				and withhold an amount for Illinois tax from A's compensation even though A's
				compensation is subject to the Illinois income tax. Accordingly, A may be
				required to file a declaration of estimated tax. B is employed by an Illinois
				corporation and is paid compensation in Illinois of $10,000 per year. B's
				compensation is subject to withholding for Illinois income tax. B may enter
				into an agreement with her employer to withhold an additional amount from her
				compensation to cover the amount of Illinois tax due on A's compensation. Thus,
				the withholding on B's compensation when credited against A and B's joint and
				several tax liability may eliminate the necessity for the filing of any
				declaration of estimated tax.