102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB3486

 

Introduced 1/19/2022, by Sen. Julie A. Morrison

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/704A

    Amends the Illinois Income Tax Act. Provides for a credit against withholding taxes in an amount equal to the wages or salary paid by a private employer to an Illinois employee while the employee is on organ donation leave if the employer grants all of its employees the option of taking a paid leave of absence of at least 30 days for the purpose of serving as an organ donor or bone marrow donor. Provides that the credit may not exceed $1,000 for each employee who takes organ donation leave. Provides that such a leave of absence must be taken without loss of pay, vacation time, compensatory time, personal days, or sick time for at least the first 30 days of the leave of absence. Provides that the credit applies for reporting periods beginning on or after January 1, 2022. Effective immediately.


LRB102 24636 HLH 33874 b

 

 

A BILL FOR

 

SB3486LRB102 24636 HLH 33874 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Income Tax Act is amended by
5changing Section 704A as follows:
 
6    (35 ILCS 5/704A)
7    Sec. 704A. Employer's return and payment of tax withheld.
8    (a) In general, every employer who deducts and withholds
9or is required to deduct and withhold tax under this Act on or
10after January 1, 2008 shall make those payments and returns as
11provided in this Section.
12    (b) Returns. Every employer shall, in the form and manner
13required by the Department, make returns with respect to taxes
14withheld or required to be withheld under this Article 7 for
15each quarter beginning on or after January 1, 2008, on or
16before the last day of the first month following the close of
17that quarter.
18    (c) Payments. With respect to amounts withheld or required
19to be withheld on or after January 1, 2008:
20        (1) Semi-weekly payments. For each calendar year, each
21    employer who withheld or was required to withhold more
22    than $12,000 during the one-year period ending on June 30
23    of the immediately preceding calendar year, payment must

 

 

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1    be made:
2            (A) on or before each Friday of the calendar year,
3        for taxes withheld or required to be withheld on the
4        immediately preceding Saturday, Sunday, Monday, or
5        Tuesday;
6            (B) on or before each Wednesday of the calendar
7        year, for taxes withheld or required to be withheld on
8        the immediately preceding Wednesday, Thursday, or
9        Friday.
10        Beginning with calendar year 2011, payments made under
11    this paragraph (1) of subsection (c) must be made by
12    electronic funds transfer.
13        (2) Semi-weekly payments. Any employer who withholds
14    or is required to withhold more than $12,000 in any
15    quarter of a calendar year is required to make payments on
16    the dates set forth under item (1) of this subsection (c)
17    for each remaining quarter of that calendar year and for
18    the subsequent calendar year.
19        (3) Monthly payments. Each employer, other than an
20    employer described in items (1) or (2) of this subsection,
21    shall pay to the Department, on or before the 15th day of
22    each month the taxes withheld or required to be withheld
23    during the immediately preceding month.
24        (4) Payments with returns. Each employer shall pay to
25    the Department, on or before the due date for each return
26    required to be filed under this Section, any tax withheld

 

 

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1    or required to be withheld during the period for which the
2    return is due and not previously paid to the Department.
3    (d) Regulatory authority. The Department may, by rule:
4        (1) Permit employers, in lieu of the requirements of
5    subsections (b) and (c), to file annual returns due on or
6    before January 31 of the year for taxes withheld or
7    required to be withheld during the previous calendar year
8    and, if the aggregate amounts required to be withheld by
9    the employer under this Article 7 (other than amounts
10    required to be withheld under Section 709.5) do not exceed
11    $1,000 for the previous calendar year, to pay the taxes
12    required to be shown on each such return no later than the
13    due date for such return.
14        (2) Provide that any payment required to be made under
15    subsection (c)(1) or (c)(2) is deemed to be timely to the
16    extent paid by electronic funds transfer on or before the
17    due date for deposit of federal income taxes withheld
18    from, or federal employment taxes due with respect to, the
19    wages from which the Illinois taxes were withheld.
20        (3) Designate one or more depositories to which
21    payment of taxes required to be withheld under this
22    Article 7 must be paid by some or all employers.
23        (4) Increase the threshold dollar amounts at which
24    employers are required to make semi-weekly payments under
25    subsection (c)(1) or (c)(2).
26    (e) Annual return and payment. Every employer who deducts

 

 

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1and withholds or is required to deduct and withhold tax from a
2person engaged in domestic service employment, as that term is
3defined in Section 3510 of the Internal Revenue Code, may
4comply with the requirements of this Section with respect to
5such employees by filing an annual return and paying the taxes
6required to be deducted and withheld on or before the 15th day
7of the fourth month following the close of the employer's
8taxable year. The Department may allow the employer's return
9to be submitted with the employer's individual income tax
10return or to be submitted with a return due from the employer
11under Section 1400.2 of the Unemployment Insurance Act.
12    (f) Magnetic media and electronic filing. With respect to
13taxes withheld in calendar years prior to 2017, any W-2 Form
14that, under the Internal Revenue Code and regulations
15promulgated thereunder, is required to be submitted to the
16Internal Revenue Service on magnetic media or electronically
17must also be submitted to the Department on magnetic media or
18electronically for Illinois purposes, if required by the
19Department.
20    With respect to taxes withheld in 2017 and subsequent
21calendar years, the Department may, by rule, require that any
22return (including any amended return) under this Section and
23any W-2 Form that is required to be submitted to the Department
24must be submitted on magnetic media or electronically.
25    The due date for submitting W-2 Forms shall be as
26prescribed by the Department by rule.

 

 

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1    (g) For amounts deducted or withheld after December 31,
22009, a taxpayer who makes an election under subsection (f) of
3Section 5-15 of the Economic Development for a Growing Economy
4Tax Credit Act for a taxable year shall be allowed a credit
5against payments due under this Section for amounts withheld
6during the first calendar year beginning after the end of that
7taxable year equal to the amount of the credit for the
8incremental income tax attributable to full-time employees of
9the taxpayer awarded to the taxpayer by the Department of
10Commerce and Economic Opportunity under the Economic
11Development for a Growing Economy Tax Credit Act for the
12taxable year and credits not previously claimed and allowed to
13be carried forward under Section 211(4) of this Act as
14provided in subsection (f) of Section 5-15 of the Economic
15Development for a Growing Economy Tax Credit Act. The credit
16or credits may not reduce the taxpayer's obligation for any
17payment due under this Section to less than zero. If the amount
18of the credit or credits exceeds the total payments due under
19this Section with respect to amounts withheld during the
20calendar year, the excess may be carried forward and applied
21against the taxpayer's liability under this Section in the
22succeeding calendar years as allowed to be carried forward
23under paragraph (4) of Section 211 of this Act. The credit or
24credits shall be applied to the earliest year for which there
25is a tax liability. If there are credits from more than one
26taxable year that are available to offset a liability, the

 

 

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1earlier credit shall be applied first. Each employer who
2deducts and withholds or is required to deduct and withhold
3tax under this Act and who retains income tax withholdings
4under subsection (f) of Section 5-15 of the Economic
5Development for a Growing Economy Tax Credit Act must make a
6return with respect to such taxes and retained amounts in the
7form and manner that the Department, by rule, requires and pay
8to the Department or to a depositary designated by the
9Department those withheld taxes not retained by the taxpayer.
10For purposes of this subsection (g), the term taxpayer shall
11include taxpayer and members of the taxpayer's unitary
12business group as defined under paragraph (27) of subsection
13(a) of Section 1501 of this Act. This Section is exempt from
14the provisions of Section 250 of this Act. No credit awarded
15under the Economic Development for a Growing Economy Tax
16Credit Act for agreements entered into on or after January 1,
172015 may be credited against payments due under this Section.
18    (g-1) For amounts deducted or withheld after December 31,
192024, a taxpayer who makes an election under the Reimagining
20Electric Vehicles in Illinois Act shall be allowed a credit
21against payments due under this Section for amounts withheld
22during the first quarterly reporting period beginning after
23the certificate is issued equal to the portion of the REV
24Illinois Credit attributable to the incremental income tax
25attributable to new employees and retained employees as
26certified by the Department of Commerce and Economic

 

 

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1Opportunity pursuant to an agreement with the taxpayer under
2the Reimagining Electric Vehicles in Illinois Act for the
3taxable year. The credit or credits may not reduce the
4taxpayer's obligation for any payment due under this Section
5to less than zero. If the amount of the credit or credits
6exceeds the total payments due under this Section with respect
7to amounts withheld during the quarterly reporting period, the
8excess may be carried forward and applied against the
9taxpayer's liability under this Section in the succeeding
10quarterly reporting period as allowed to be carried forward
11under paragraph (4) of Section 211 of this Act. The credit or
12credits shall be applied to the earliest quarterly reporting
13period for which there is a tax liability. If there are credits
14from more than one quarterly reporting period that are
15available to offset a liability, the earlier credit shall be
16applied first. Each employer who deducts and withholds or is
17required to deduct and withhold tax under this Act and who
18retains income tax withholdings this subsection must make a
19return with respect to such taxes and retained amounts in the
20form and manner that the Department, by rule, requires and pay
21to the Department or to a depositary designated by the
22Department those withheld taxes not retained by the taxpayer.
23For purposes of this subsection (g-1), the term taxpayer shall
24include taxpayer and members of the taxpayer's unitary
25business group as defined under paragraph (27) of subsection
26(a) of Section 1501 of this Act. This Section is exempt from

 

 

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1the provisions of Section 250 of this Act.
2    (h) An employer may claim a credit against payments due
3under this Section for amounts withheld during the first
4calendar year ending after the date on which a tax credit
5certificate was issued under Section 35 of the Small Business
6Job Creation Tax Credit Act. The credit shall be equal to the
7amount shown on the certificate, but may not reduce the
8taxpayer's obligation for any payment due under this Section
9to less than zero. If the amount of the credit exceeds the
10total payments due under this Section with respect to amounts
11withheld during the calendar year, the excess may be carried
12forward and applied against the taxpayer's liability under
13this Section in the 5 succeeding calendar years. The credit
14shall be applied to the earliest year for which there is a tax
15liability. If there are credits from more than one calendar
16year that are available to offset a liability, the earlier
17credit shall be applied first. This Section is exempt from the
18provisions of Section 250 of this Act.
19    (i) Each employer with 50 or fewer full-time equivalent
20employees during the reporting period may claim a credit
21against the payments due under this Section for each qualified
22employee in an amount equal to the maximum credit allowable.
23The credit may be taken against payments due for reporting
24periods that begin on or after January 1, 2020, and end on or
25before December 31, 2027. An employer may not claim a credit
26for an employee who has worked fewer than 90 consecutive days

 

 

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1immediately preceding the reporting period; however, such
2credits may accrue during that 90-day period and be claimed
3against payments under this Section for future reporting
4periods after the employee has worked for the employer at
5least 90 consecutive days. In no event may the credit exceed
6the employer's liability for the reporting period. Each
7employer who deducts and withholds or is required to deduct
8and withhold tax under this Act and who retains income tax
9withholdings under this subsection must make a return with
10respect to such taxes and retained amounts in the form and
11manner that the Department, by rule, requires and pay to the
12Department or to a depositary designated by the Department
13those withheld taxes not retained by the employer.
14    For each reporting period, the employer may not claim a
15credit or credits for more employees than the number of
16employees making less than the minimum or reduced wage for the
17current calendar year during the last reporting period of the
18preceding calendar year. Notwithstanding any other provision
19of this subsection, an employer shall not be eligible for
20credits for a reporting period unless the average wage paid by
21the employer per employee for all employees making less than
22$55,000 during the reporting period is greater than the
23average wage paid by the employer per employee for all
24employees making less than $55,000 during the same reporting
25period of the prior calendar year.
26    For purposes of this subsection (i):

 

 

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1    "Compensation paid in Illinois" has the meaning ascribed
2to that term under Section 304(a)(2)(B) of this Act.
3    "Employer" and "employee" have the meaning ascribed to
4those terms in the Minimum Wage Law, except that "employee"
5also includes employees who work for an employer with fewer
6than 4 employees. Employers that operate more than one
7establishment pursuant to a franchise agreement or that
8constitute members of a unitary business group shall aggregate
9their employees for purposes of determining eligibility for
10the credit.
11    "Full-time equivalent employees" means the ratio of the
12number of paid hours during the reporting period and the
13number of working hours in that period.
14    "Maximum credit" means the percentage listed below of the
15difference between the amount of compensation paid in Illinois
16to employees who are paid not more than the required minimum
17wage reduced by the amount of compensation paid in Illinois to
18employees who were paid less than the current required minimum
19wage during the reporting period prior to each increase in the
20required minimum wage on January 1. If an employer pays an
21employee more than the required minimum wage and that employee
22previously earned less than the required minimum wage, the
23employer may include the portion that does not exceed the
24required minimum wage as compensation paid in Illinois to
25employees who are paid not more than the required minimum
26wage.

 

 

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1        (1) 25% for reporting periods beginning on or after
2    January 1, 2020 and ending on or before December 31, 2020;
3        (2) 21% for reporting periods beginning on or after
4    January 1, 2021 and ending on or before December 31, 2021;
5        (3) 17% for reporting periods beginning on or after
6    January 1, 2022 and ending on or before December 31, 2022;
7        (4) 13% for reporting periods beginning on or after
8    January 1, 2023 and ending on or before December 31, 2023;
9        (5) 9% for reporting periods beginning on or after
10    January 1, 2024 and ending on or before December 31, 2024;
11        (6) 5% for reporting periods beginning on or after
12    January 1, 2025 and ending on or before December 31, 2025.
13    The amount computed under this subsection may continue to
14be claimed for reporting periods beginning on or after January
151, 2026 and:
16        (A) ending on or before December 31, 2026 for
17    employers with more than 5 employees; or
18        (B) ending on or before December 31, 2027 for
19    employers with no more than 5 employees.
20    "Qualified employee" means an employee who is paid not
21more than the required minimum wage and has an average wage
22paid per hour by the employer during the reporting period
23equal to or greater than his or her average wage paid per hour
24by the employer during each reporting period for the
25immediately preceding 12 months. A new qualified employee is
26deemed to have earned the required minimum wage in the

 

 

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1preceding reporting period.
2    "Reporting period" means the quarter for which a return is
3required to be filed under subsection (b) of this Section.
4    (j) For reporting periods beginning on or after January 1,
52022, if a private employer grants all of its employees the
6option of taking a paid leave of absence of at least 30 days
7for the purpose of serving as an organ donor or bone marrow
8donor, then the private employer may take a credit against the
9payments due under this Section in an amount equal to the
10amount withheld under this Section with respect to wages paid
11while the employee is on organ donation leave, not to exceed
12$1,000 in withholdings for each employee who takes organ
13donation leave. To be eligible for the credit, such a leave of
14absence must be taken without loss of pay, vacation time,
15compensatory time, personal days, or sick time for at least
16the first 30 days of the leave of absence. The private employer
17shall adopt rules governing organ donation leave, including
18rules that (i) establish conditions and procedures for
19requesting and approving leave and (ii) require medical
20documentation of the proposed organ or bone marrow donation
21before leave is approved by the private employer. A private
22employer must provide, in the manner required by the
23Department, documentation from the employee's medical
24provider, which the private employer receives from the
25employee, that verifies the employee's organ donation. The
26private employer must also provide, in the manner required by

 

 

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1the Department, documentation that shows that a qualifying
2organ donor leave policy was in place and offered to all
3qualifying employees at the time the leave was taken. For the
4private employer to receive the tax credit, the employee
5taking organ donor leave must allow for the applicable medical
6records to be disclosed to the Department. If the private
7employer cannot provide the required documentation to the
8Department, then the private employer is ineligible for the
9credit under this Section. A private employer must also
10provide, in the form required by the Department, any
11additional documentation or information required by the
12Department to administer the credit under this Section. The
13credit under this subsection (j) shall be taken within one
14year after the date upon which the organ donation leave
15begins. If the leave taken spans into a second tax year, the
16employer qualifies for the allowable credit in the later of
17the 2 years. If the amount of credit exceeds the tax liability
18for the year, the excess may be carried and applied to the tax
19liability for the 3 taxable years following the excess credit
20year. The tax credit shall be applied to the earliest year for
21which there is a tax liability. If there are credits for more
22than one year that are available to offset liability, the
23earlier credit shall be applied first.
24    Nothing in this subsection (j) prohibits a private
25employer from providing an unpaid leave of absence to its
26employees for the purpose of serving as an organ donor or bone

 

 

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1marrow donor; however, if the employer's policy provides for
2fewer than 30 days of paid leave for organ or bone marrow
3donation, then the employer shall not be eligible for the
4credit under this Section.
5    As used in this subsection (j):
6        "Organ" means any biological tissue of the human body
7    that may be donated by a living donor, including, but not
8    limited to, the kidney, liver, lung, pancreas, intestine,
9    bone, skin, or any subpart of those organs.
10        "Organ donor" means a person from whose body an organ
11    is taken to be transferred to the body of another person.
12        "Private employer" means a sole proprietorship,
13    corporation, partnership, limited liability company, or
14    other entity with one or more employees. "Private
15    employer" does not include a municipality, county, State
16    agency, or other public employer.
17    This subsection (j) is exempt from the provisions of
18Section 250 of this Act.
19(Source: P.A. 101-1, eff. 2-19-19; 102-669, eff. 11-16-21.)
 
20    Section 99. Effective date. This Act takes effect upon
21becoming law.