Illinois Income Tax Withholding Requirements
Employers in Illinois must conform with these state rules relating to income tax withholding and administration.
General Withholding Requirement: Illinois income tax must be withheld from all compensation paid in Illinois to resident and nonresident employees. Compensation is paid in Illinois if:
- the services are performed entirely in the state;
- the services are performed both within and without the state, but the out-of-state services are incidental to the in-state services; or
- some of the services are performed in state and either:
- the employer's base of operations is in Illinois or
- the employer's base of operations is not in any state where some of the services are performed and the employee is an Illinois resident.
Employee Withholding Exemption Forms: Illinois Form IL-W4 must be completed by each employee, to determine the appropriate level of state income tax to withhold from earnings. Of course, Federal Form W-4 also must be completed by each employee, to determine the appropriate level of federal income tax to withhold from earnings.
Reciprocal Agreements: Illinois has reciprocal agreements in effect with Iowa, Kentucky, Michigan, and Wisconsin.
Illinois Department of Revenue
P.O. Box 19044
Springfield, Illinois 62794-9044