PART 950 SECURE CHOICE SAVINGS PROGRAM ACT : Sections Listing

TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 950 SECURE CHOICE SAVINGS PROGRAM ACT

AUTHORITY: Section 85 of the Secure Choice Savings Program Act [820 ILCS 80/85].

SOURCE: Adopted at 46 Ill. Reg. 14066, effective July 19, 2022.

 

Section 950.100  In General

 

a)         The Secure Choice Savings Program Act (the "Act"), [820 ILCS 80] establishes the Secure Choice Savings Program (the "Program"). The Secure Choice Savings Program Fund is administered by the Illinois Secure Choice Savings Board to hold the individual retirement accounts of enrollees and to operate the Program in a manner that ensures accounts of enrollees established under the Program meet the requirements of an individual retirement account (IRA) under 26 U.S.C. 408 or a Roth IRA under 26 U.S.C. 408A. (Section 15 of the Act) Except as otherwise indicated, all terms used in this part shall have the same meaning as when used in the Act or in 74 Ill. Adm. Code Part 721. 

 

b)         Each employer subject to the Act shall automatically enroll in the Program each of their employees who has not opted out of participation in the Program and shall provide payroll deduction retirement savings arrangements for those employees and deposit, on behalf of those employees, the withheld funds into the Program. (Section 60(b) of the Act)

 

c)         Whenever notice is required under the Act, it may be given or issued by mailing it by first-class mail addressed to the person concerned at his or her last known address. (Section 85(h) of the Act)

 

d)         All books and records and other papers and documents relevant to the determination of any penalty due under the Act shall, at all times during business hours of the day, be subject to inspection by the Department or its duly authorized agents and employees. (Section 85(i) of the Act)

 

e)         The Department may require employers to report information relevant to their compliance with the Act on returns otherwise due from the employers under IITA Section 704A and failure to provide the requested information on a return shall cause that return to be treated as unprocessable. (Section 85(j) of the Act)

 

f)         Except as provided in subsections (f)(1) and (f)(2) below, all information received by the Department from returns filed by an employer or from any investigation conducted under the provisions of the Act shall be confidential, except for official purposes within the Department or pursuant to official procedures for collection of penalties assessed under the Act.

 

1)         Nothing contained in this subsection shall prevent the Director from publishing or making available to the public reasonable statistics concerning the operation of the Act wherein the contents of returns are grouped into aggregates in such a way that the specific information of any employer shall not be disclosed.

 

2)         Nothing contained in this subsection shall prevent the Director from divulging information to an authorized representative of the employer or to any person pursuant to a request or authorization made by the employer or by an authorized representative of the employer. (Section 85(l) of the Act)

 

Section 950.150  Definitions

 

“Department” means the Department of Revenue.

 

"Employee" means any individual who is employed by an employer and who has wages that are allocable to Illinois during a calendar year under the provisions of Section 304(a)(2)(B) of the Illinois Income Tax Act.

 

"Employer" means a person or entity engaged in a business, industry, profession, trade, or other enterprise in Illinois, whether for profit or not for profit, that (i) has employed at least 5 employees in the State during every quarter of the previous calendar year, (ii) has been in business at least 2 years, and (iii) has not offered a qualified retirement plan, including, but not limited to, a plan qualified under Section 401(a), Section 401(k), Section 403(a), Section 403(b), Section 408(k), Section 408(p), or Section 457(b) of the Internal Revenue Code of 1986 in the preceding 2 years. (Section 5 of the Act)

 

The enrollment deadline is November 1, 2022 for employers with more than 15 but fewer than 25 employees and November 1, 2023 for employers with 5 or more employees but no more than 15 employees. (Section 60 of the Act)

 

Section 950.200  Penalties

 

a)         An employer who fails without reasonable cause to enroll an employee in the Program within the time prescribed under Section 60 of the Act shall be subject to a penalty equal to:

 

1)                  $250 per employee for the initial calendar year during which the employer fails to comply with the requirements of Section 100 of this Part; (Section 85(a)(1) of the Act) or

 

2)         $500 per employee for each subsequent calendar year during which the employer fails to comply with the requirements of Section 100 of this Part. Years during which the employer is noncompliant need not be consecutive for the $500 penalty to apply. The $500 penalty shall apply if the employer previously was assessed a $250 penalty and the employer did not come into compliance or has fallen out of compliance. (Section 85(a)(2) of the Act)

 

b)         The Department shall determine the total number of employees using the annual average from data reported quarterly by the employer pursuant to Article 7 of the Illinois Income Tax Act.

 

c)         Penalties imposed under the Act are assessed and collected by the Department.  (Section 85 of the Act)

 

d)         Penalties provided under the Act are imposed only if the employer fails to enroll an employee without reasonable cause. (Section 85(a) of the Act) The determination of whether an employer had reasonable cause shall be made on a case by case basis taking into account all pertinent facts and circumstances. The most important factor to be considered in making a determination to abate a penalty will be the extent to which the employer made a good faith effort comply with the Act.

 

1)         An employer will be considered to have made a good faith effort to comply with the Act if the employer exercised ordinary business care and prudence in doing so. 

 

2)         An employer's history of compliance is also a factor to be considered in determining whether the employer acted in good faith.

 

3)         If an employee is a nonresident whose base of operation is outside this State, the employer has reasonable cause for not enrolling the employee prior to the 31st working day in which the employee performs services for the employee in this State (within the meaning of IITA Section 304(a)(2)(B)(iii)) during the first calendar year for which the employee meets the requirements for enrolment under the Act.

 

Section 950.250  Assessment

 

a)         After determining that an employer is subject to penalty under the Act for a calendar year, the Department shall issue a notice of proposed assessment to the employer, stating:

 

1)         the number of employees for which the $250 penalty under Section 950.200(a)(1) is proposed for the calendar year;

 

2)         the number of employees for which the $500 penalty under Section 950.200(a)(2) is proposed for the calendar year; and

 

3)         the total amount of penalties proposed. (Section 85(b) of the Act)

 

b)         A written protest against the proposed assessment may be filed with the Department, setting forth the grounds on which such protest is based.  (Section 85(c) of the Act) A protest must be in writing and must include the following at a minimum:

 

1)         The employer’s name, address and federal employer identification number;

 

2)         The date of issuance of the notice of proposed assessment which is being contested;

 

3)         The calendar years involved;

 

4)         To the extent possible, the factual and legal grounds upon which the objections to the notice of proposed assessment are based;

 

5)         A certification that the facts stated are true, correct and complete to the best of the affiant's knowledge and belief.

 

c)         Upon the expiration of 120 days after the date on which a notice of proposed assessment was issued, the penalties specified in the notice shall be deemed assessed, unless the employer had filed a protest with the Department under subsection (b) or comes into full compliance with the Program as required under Section 60 of the Act. (Section 85(b) of the Act)

 

d)         If, within 120 days after the date on which a notice of proposed assessment was issued, a protest of the notice of proposed assessment is filed under subsection (b), the penalties specified in the notice shall be deemed assessed upon the date when the decision of the Department with respect to the protest becomes final under subsection (e). (Section 85(b) of the Act)

 

e)         If the protest is filed within 120 days after the date the notice of proposed assessment is issued, the Department shall reconsider the proposed assessment and shall grant the employer a hearing. As soon as practicable after the reconsideration and hearing, the Department shall issue a notice of decision to the employer, setting forth the Department's findings of fact and the basis of the decision. (Section 85(c) of the Act) The decision of the Department shall become final:

 

1)         if no action for review of the decision is commenced under the Administrative Review Law, on the date on which the time for commencement of the review has expired; (Section 85(c)(1) of the Act) or

 

2)         if a timely action for review of the decision is commenced under the Administrative Review Law, on the date all proceedings in court for the review of the assessment have terminated or the time for taking the action for review has expired without proceedings being instituted. (Section 85(c)(2) of the Act)

 

Section 950.300  Collection

 

a)         As soon as practicable after the penalties specified in a notice of proposed assessment are deemed assessed, the Department shall give notice to the employer liable for any unpaid portion of such assessment, stating the amount due and demanding payment. If an employer neglects or refuses to pay the entire liability shown on the notice and demand within 10 days after the notice and demand is issued, the unpaid amount of the liability shall be a lien in favor of the State of Illinois upon all property and rights to property, whether real or personal, belonging to the employer, and the provisions in the Illinois Income Tax Act regarding liens, levies and collection actions with regard to assessed and unpaid liabilities under that Act, including the periods for taking any action, shall apply. (Section 85(d) of the Act)

 

b)         For purposes of any provision of State law allowing the Department or any other agency of this State to offset an amount owed to a taxpayer against a tax liability of that taxpayer or allowing the Department to offset an overpayment of tax against any liability owed to the State, a penalty assessed under Section 85 of the Act shall be deemed to be a tax liability of the employer and any refund due to an employer shall be deemed to be an overpayment of tax of the employer. (Section 85(k) of the Act)

 

Section 950.350  Refunds

 

a)         An employer who has overpaid a penalty assessed under Section 85 of the Act may file a claim for refund with the Department. A claim shall be in writing and shall state the specific grounds upon which it is founded. As soon as practicable after a claim for refund is filed, the Department shall examine it and either issue a refund or issue a notice of denial. A denial of a claim for refund becomes final 120 days after the date of issuance of the notice of the denial except for such amounts denied as to which the employer has filed a protest with the Department. (Section 85(e) of the Act) A protest must be in writing and must include the following at a minimum:

 

1)         The employer’s name, address and federal employer identification number;

 

2)         The date of issuance of the notice of denial which is being contested;

 

3)         The calendar years involved;

 

4)         To the extent possible, the factual and legal grounds upon which the objections to the notice of denial are based;

 

5)         A certification that the facts stated are true, correct and complete to the best of the affiant's knowledge and belief.

 

b)         If a protest is filed within 120 days, the Department shall reconsider the denial and grant the employer a hearing. As soon as practicable after the reconsideration and hearing, the Department shall issue a notice of decision to the employer. The notice shall set forth briefly the Department's findings of fact and the basis of decision in each case decided in whole or in part adversely to the employer. (Section 85(e) of the Act) If a protest has been timely filed, the decision of the Department shall become final:

 

1)         if no action for review of the decision is commenced under the Administrative Review Law, on the date on which the time for commencement of such review has expired; (Section 85(e)(1) of the Act) or

 

2)         if a timely action for review of the decision is commenced under the Administrative Review Law, on the date all proceedings in court for the review of the assessment have terminated or the time for the taking the action for review has expired without proceedings being instituted. (Section 85(e)(2) of the Act)

 

Section 950.400  Administrative Review

 

a)         The provisions of the Administrative Review Law [735 ILCS 5/3] shall apply to and govern all proceedings for the judicial review of final decisions of the Department in response to a protest of a notice of proposed assessment or notice of refund claim denial filed by the employer under Section 85(c) and (e) of the Act. (See Section 85(g) of the Act.)

 

b)         Final decisions of the Department shall constitute "administrative decisions" as defined in Section 3-101 of the Code of Civil Procedure. (Section 85(g) of the Act)

 

Section 950.450  Limitations

 

a)         No notice of proposed assessment may be issued with respect to a calendar year after June 30 of the fourth subsequent calendar year. (Section 85(f) of the Act)

 

b)         No claim for refund may be filed more than 1 year after the date of payment of the amount to be refunded. (Section 85(f) of the Act)

 

Section 950.500  Interest

 

No interest shall accrue or be paid on any penalty imposed under the Act or on any refund payable under the Act.