labor lawAdivision of labor law center

It may be windy in Illinois, but don’t get blown away by all the tax information! Here’s the short and sweet of personal income tax: each person that earns a wage in the state of Illinois, regardless of where they live, must pay state income taxes, in addition to federal income taxes. But how much should come out of each person’s income for state income taxes? Good question – there is a simple form to help determine this.

In addition to the federal income tax withholding form, W4, each employee needs to fill out an IL-W4 form for their Illinois State income tax withholding. This form has similar information on it, but makes sure you have the proper withholding allowances for state-level withholdings. This form is available online here.

Also, to avoid double-taxation of income, the state of Illinois has Reciprocal Agreements in effect with Iowa, Kentucky, Michigan, and Wisconsin – meaning that if the individual lives in one state and works in another, income tax will only be withheld for the state of residence. A form IL-W-5-NR should be used to establish the state of residence for any employee that wishes to alleviate themselves of the burden of double-taxation in these particular states.

And, please take note! If no income tax withholding form is filled out, taxes must be withheld at the highest level possible – single, no deduction allowances – even if the employee is known to be married. To prevent things like this from happening, I cannot stress enough the importance of having each employee file both their IL-W4 as well as a W4 form for federal income taxes, so please make their completion a priority.

Last 10 posts by Cara

• Massachusetts W-4 - September 24th, 2006
• Maryland W-4 - September 24th, 2006
• Maine W-4 - September 24th, 2006
• Louisiana W-4 - September 24th, 2006
• Kentucky W-4 - September 24th, 2006
• Kansas W-4 - September 24th, 2006
• Iowa W-4 - September 24th, 2006
• Indiana W-4 - September 24th, 2006
• Idaho W-4 - September 24th, 2006
• Federal W-4 Form - August 27th, 2006

1. Posted by: Rose

   I have been searching all over the internet and cannot find an answer to the following question:

   At one point in time, I thought that the IRS required an organizations payroll department to have a signed original W-4 (Federal tax form) on file for every newly hired employee. Is that still the case or does a copied or scanned document suffice?

   Thanks for any insight you can provide.

2. Posted by: Cara

   Hi Rose! You are correct that this was a requirement at one point. However, since the 1990s, the IRS accepts scanned, signed versions of all types of documents. This even includes accepting electronic or faxed tax returns, with a scanned signature or an electronic signature, or a PIN number instead of a signature. Employers who scan HR documents and store them on a hard drive need not fear the IRS. Thanks for raising an important point, and for reading the blogs! Cara