Illinois DOR issues withholding tax reminder
Electronic 2014 Form W-2 filings due Feb. 17
TAX ALERT |
On Jan. 20, 2015, Illinois issued an informational bulletin to remind Illinois employers of significant changes to the state’s payroll withholding requirements implemented for the 2015 calendar year, including the modification of the annual Form W-2 filing deadline to Feb. 15, reduction in the individual income tax rate from 5 percent to 3.75 percent, and increase in the individual income tax exemption amount from $2,125 to $2,150.
This information bulletin follows up on an emergency rule issued by the Illinois Department of Revenue on Dec. 22, 2014, requiring certain employers to submit Form W-2 to the department by Feb. 15 following the end of the calendar year, starting with Feb. 15, 2015. Affected businesses include payroll providers that file payroll returns and complete Form W-2 for employers of any size, as well as all employers required to electronically transmit Forms W-2 to the federal government. Employers that do not meet either of these criteria, but choose to file Form W-2 electronically, are encouraged to file Forms W-2 by Feb. 15, but are not required to do so.
Given the short amount of lead time provided by the emergency rule, employers that make a reasonable and good faith effort to comply with the Feb. 15 deadline will not be penalized for 2014 wage reporting purposes. Additionally, per the information bulletin, it is the position of the department that employers are not required to file Forms W-2 reporting 2014 wages until Feb. 17, 2015, because Feb. 15, 2015, falls on Sunday and Feb. 16 is a federal holiday.
All Illinois employers should review their withholding systems to ensure that they have properly implemented the reduction in the individual income tax rate and increase in the individual tax exemption for 2015. Further, Illinois employers required to file Forms W-2 electronically should ensure that procedures are in place to comply with the new filing deadline.