Full Text of HB3473 103rd General Assembly
HB3473 103RD GENERAL ASSEMBLY |
| | 103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024 HB3473 Introduced 2/17/2023, by Rep. Nabeela Syed SYNOPSIS AS INTRODUCED: |
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Amends the Illinois Income Tax Act. Provides that a credit against withholding taxes in an amount equal to the amount withheld with respect to wages paid by a private employer while the employee is on organ donation leave may not exceed $20,833.33 (rather than $1,000) for each employee who takes organ donation leave. Defines "Department" for these purposes to mean the Department of Revenue. Effective immediately.
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| | A BILL FOR |
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| 1 | | AN ACT concerning revenue.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois Income Tax Act is amended by | 5 | | changing 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 | 9 | | or is required to deduct and withhold tax under this Act on or | 10 | | after January 1, 2008 shall make those payments and returns as | 11 | | provided in this Section. | 12 | | (b) Returns. Every employer shall, in the form and manner | 13 | | required by the Department, make returns with respect to taxes | 14 | | withheld or required to be withheld under this Article 7 for | 15 | | each quarter beginning on or after January 1, 2008, on or | 16 | | before the last day of the first month following the close of | 17 | | that quarter. | 18 | | (c) Payments. With respect to amounts withheld or required | 19 | | to 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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| 1 | | and withholds or is required to deduct and withhold tax from a | 2 | | person engaged in domestic service employment, as that term is | 3 | | defined in Section 3510 of the Internal Revenue Code, may | 4 | | comply with the requirements of this Section with respect to | 5 | | such employees by filing an annual return and paying the taxes | 6 | | required to be deducted and withheld on or before the 15th day | 7 | | of the fourth month following the close of the employer's | 8 | | taxable year. The Department may allow the employer's return | 9 | | to be submitted with the employer's individual income tax | 10 | | return or to be submitted with a return due from the employer | 11 | | under Section 1400.2 of the Unemployment Insurance Act. | 12 | | (f) Magnetic media and electronic filing. With respect to | 13 | | taxes withheld in calendar years prior to 2017, any W-2 Form | 14 | | that, under the Internal Revenue Code and regulations | 15 | | promulgated thereunder, is required to be submitted to the | 16 | | Internal Revenue Service on magnetic media or electronically | 17 | | must also be submitted to the Department on magnetic media or | 18 | | electronically for Illinois purposes, if required by the | 19 | | Department. | 20 | | With respect to taxes withheld in 2017 and subsequent | 21 | | calendar years, the Department may, by rule, require that any | 22 | | return (including any amended return) under this Section and | 23 | | any W-2 Form that is required to be submitted to the Department | 24 | | must be submitted on magnetic media or electronically. | 25 | | The due date for submitting W-2 Forms shall be as | 26 | | prescribed by the Department by rule. |
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| 1 | | (g) For amounts deducted or withheld after December 31, | 2 | | 2009, a taxpayer who makes an election under subsection (f) of | 3 | | Section 5-15 of the Economic Development for a Growing Economy | 4 | | Tax Credit Act for a taxable year shall be allowed a credit | 5 | | against payments due under this Section for amounts withheld | 6 | | during the first calendar year beginning after the end of that | 7 | | taxable year equal to the amount of the credit for the | 8 | | incremental income tax attributable to full-time employees of | 9 | | the taxpayer awarded to the taxpayer by the Department of | 10 | | Commerce and Economic Opportunity under the Economic | 11 | | Development for a Growing Economy Tax Credit Act for the | 12 | | taxable year and credits not previously claimed and allowed to | 13 | | be carried forward under Section 211(4) of this Act as | 14 | | provided in subsection (f) of Section 5-15 of the Economic | 15 | | Development for a Growing Economy Tax Credit Act. The credit | 16 | | or credits may not reduce the taxpayer's obligation for any | 17 | | payment due under this Section to less than zero. If the amount | 18 | | of the credit or credits exceeds the total payments due under | 19 | | this Section with respect to amounts withheld during the | 20 | | calendar year, the excess may be carried forward and applied | 21 | | against the taxpayer's liability under this Section in the | 22 | | succeeding calendar years as allowed to be carried forward | 23 | | under paragraph (4) of Section 211 of this Act. The credit or | 24 | | credits shall be applied to the earliest year for which there | 25 | | is a tax liability. If there are credits from more than one | 26 | | taxable year that are available to offset a liability, the |
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| 1 | | earlier credit shall be applied first. Each employer who | 2 | | deducts and withholds or is required to deduct and withhold | 3 | | tax under this Act and who retains income tax withholdings | 4 | | under subsection (f) of Section 5-15 of the Economic | 5 | | Development for a Growing Economy Tax Credit Act must make a | 6 | | return with respect to such taxes and retained amounts in the | 7 | | form and manner that the Department, by rule, requires and pay | 8 | | to the Department or to a depositary designated by the | 9 | | Department those withheld taxes not retained by the taxpayer. | 10 | | For purposes of this subsection (g), the term taxpayer shall | 11 | | include taxpayer and members of the taxpayer's unitary | 12 | | business group as defined under paragraph (27) of subsection | 13 | | (a) of Section 1501 of this Act. This Section is exempt from | 14 | | the provisions of Section 250 of this Act. No credit awarded | 15 | | under the Economic Development for a Growing Economy Tax | 16 | | Credit Act for agreements entered into on or after January 1, | 17 | | 2015 may be credited against payments due under this Section. | 18 | | (g-1) For amounts deducted or withheld after December 31, | 19 | | 2024, a taxpayer who makes an election under the Reimagining | 20 | | Electric Vehicles in Illinois Act shall be allowed a credit | 21 | | against payments due under this Section for amounts withheld | 22 | | during the first quarterly reporting period beginning after | 23 | | the certificate is issued equal to the portion of the REV | 24 | | Illinois Credit attributable to the incremental income tax | 25 | | attributable to new employees and retained employees as | 26 | | certified by the Department of Commerce and Economic |
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| 1 | | Opportunity pursuant to an agreement with the taxpayer under | 2 | | the Reimagining Electric Vehicles in Illinois Act for the | 3 | | taxable year. The credit or credits may not reduce the | 4 | | taxpayer's obligation for any payment due under this Section | 5 | | to less than zero. If the amount of the credit or credits | 6 | | exceeds the total payments due under this Section with respect | 7 | | to amounts withheld during the quarterly reporting period, the | 8 | | excess may be carried forward and applied against the | 9 | | taxpayer's liability under this Section in the succeeding | 10 | | quarterly reporting period as allowed to be carried forward | 11 | | under paragraph (4) of Section 211 of this Act. The credit or | 12 | | credits shall be applied to the earliest quarterly reporting | 13 | | period for which there is a tax liability. If there are credits | 14 | | from more than one quarterly reporting period that are | 15 | | available to offset a liability, the earlier credit shall be | 16 | | applied first. Each employer who deducts and withholds or is | 17 | | required to deduct and withhold tax under this Act and who | 18 | | retains income tax withholdings this subsection must make a | 19 | | return with respect to such taxes and retained amounts in the | 20 | | form and manner that the Department, by rule, requires and pay | 21 | | to the Department or to a depositary designated by the | 22 | | Department those withheld taxes not retained by the taxpayer. | 23 | | For purposes of this subsection (g-1), the term taxpayer shall | 24 | | include taxpayer and members of the taxpayer's unitary | 25 | | business 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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| 1 | | the provisions of Section 250 of this Act. | 2 | | (g-2) For amounts deducted or withheld after December 31, | 3 | | 2024, a taxpayer who makes an election under the Manufacturing | 4 | | Illinois Chips for Real Opportunity (MICRO) Act shall be | 5 | | allowed a credit against payments due under this Section for | 6 | | amounts withheld during the first quarterly reporting period | 7 | | beginning after the certificate is issued equal to the portion | 8 | | of the MICRO Illinois Credit attributable to the incremental | 9 | | income tax attributable to new employees and retained | 10 | | employees as certified by the Department of Commerce and | 11 | | Economic Opportunity pursuant to an agreement with the | 12 | | taxpayer under the Manufacturing Illinois Chips for Real | 13 | | Opportunity (MICRO) Act for the taxable year. The credit or | 14 | | credits may not reduce the taxpayer's obligation for any | 15 | | payment due under this Section to less than zero. If the amount | 16 | | of the credit or credits exceeds the total payments due under | 17 | | this Section with respect to amounts withheld during the | 18 | | quarterly reporting period, the excess may be carried forward | 19 | | and applied against the taxpayer's liability under this | 20 | | Section in the succeeding quarterly reporting period as | 21 | | allowed to be carried forward under paragraph (4) of Section | 22 | | 211 of this Act. The credit or credits shall be applied to the | 23 | | earliest quarterly reporting period for which there is a tax | 24 | | liability. If there are credits from more than one quarterly | 25 | | reporting period that are available to offset a liability, the | 26 | | earlier credit shall be applied first. Each employer who |
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| 1 | | deducts and withholds or is required to deduct and withhold | 2 | | tax under this Act and who retains income tax withholdings | 3 | | this subsection must make a return with respect to such taxes | 4 | | and retained amounts in the form and manner that the | 5 | | Department, by rule, requires and pay to the Department or to a | 6 | | depositary designated by the Department those withheld taxes | 7 | | not retained by the taxpayer. For purposes of this subsection, | 8 | | the term taxpayer shall include taxpayer and members of the | 9 | | taxpayer's unitary business group as defined under paragraph | 10 | | (27) of subsection (a) of Section 1501 of this Act. This | 11 | | Section is exempt from the provisions of Section 250 of this | 12 | | Act. | 13 | | (h) An employer may claim a credit against payments due | 14 | | under this Section for amounts withheld during the first | 15 | | calendar year ending after the date on which a tax credit | 16 | | certificate was issued under Section 35 of the Small Business | 17 | | Job Creation Tax Credit Act. The credit shall be equal to the | 18 | | amount shown on the certificate, but may not reduce the | 19 | | taxpayer's obligation for any payment due under this Section | 20 | | to less than zero. If the amount of the credit exceeds the | 21 | | total payments due under this Section with respect to amounts | 22 | | withheld during the calendar year, the excess may be carried | 23 | | forward and applied against the taxpayer's liability under | 24 | | this Section in the 5 succeeding calendar years. The credit | 25 | | shall be applied to the earliest year for which there is a tax | 26 | | liability. If there are credits from more than one calendar |
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| 1 | | year that are available to offset a liability, the earlier | 2 | | credit shall be applied first. This Section is exempt from the | 3 | | provisions of Section 250 of this Act. | 4 | | (i) Each employer with 50 or fewer full-time equivalent | 5 | | employees during the reporting period may claim a credit | 6 | | against the payments due under this Section for each qualified | 7 | | employee in an amount equal to the maximum credit allowable. | 8 | | The credit may be taken against payments due for reporting | 9 | | periods that begin on or after January 1, 2020, and end on or | 10 | | before December 31, 2027. An employer may not claim a credit | 11 | | for an employee who has worked fewer than 90 consecutive days | 12 | | immediately preceding the reporting period; however, such | 13 | | credits may accrue during that 90-day period and be claimed | 14 | | against payments under this Section for future reporting | 15 | | periods after the employee has worked for the employer at | 16 | | least 90 consecutive days. In no event may the credit exceed | 17 | | the employer's liability for the reporting period. Each | 18 | | employer who deducts and withholds or is required to deduct | 19 | | and withhold tax under this Act and who retains income tax | 20 | | withholdings under this subsection must make a return with | 21 | | respect to such taxes and retained amounts in the form and | 22 | | manner that the Department, by rule, requires and pay to the | 23 | | Department or to a depositary designated by the Department | 24 | | those withheld taxes not retained by the employer. | 25 | | For each reporting period, the employer may not claim a | 26 | | credit or credits for more employees than the number of |
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| 1 | | employees making less than the minimum or reduced wage for the | 2 | | current calendar year during the last reporting period of the | 3 | | preceding calendar year. Notwithstanding any other provision | 4 | | of this subsection, an employer shall not be eligible for | 5 | | credits for a reporting period unless the average wage paid by | 6 | | the employer per employee for all employees making less than | 7 | | $55,000 during the reporting period is greater than the | 8 | | average wage paid by the employer per employee for all | 9 | | employees making less than $55,000 during the same reporting | 10 | | period of the prior calendar year. | 11 | | For purposes of this subsection (i): | 12 | | "Compensation paid in Illinois" has the meaning ascribed | 13 | | to that term under Section 304(a)(2)(B) of this Act. | 14 | | "Employer" and "employee" have the meaning ascribed to | 15 | | those terms in the Minimum Wage Law, except that "employee" | 16 | | also includes employees who work for an employer with fewer | 17 | | than 4 employees. Employers that operate more than one | 18 | | establishment pursuant to a franchise agreement or that | 19 | | constitute members of a unitary business group shall aggregate | 20 | | their employees for purposes of determining eligibility for | 21 | | the credit. | 22 | | "Full-time equivalent employees" means the ratio of the | 23 | | number of paid hours during the reporting period and the | 24 | | number of working hours in that period. | 25 | | "Maximum credit" means the percentage listed below of the | 26 | | difference between the amount of compensation paid in Illinois |
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| 1 | | to employees who are paid not more than the required minimum | 2 | | wage reduced by the amount of compensation paid in Illinois to | 3 | | employees who were paid less than the current required minimum | 4 | | wage during the reporting period prior to each increase in the | 5 | | required minimum wage on January 1. If an employer pays an | 6 | | employee more than the required minimum wage and that employee | 7 | | previously earned less than the required minimum wage, the | 8 | | employer may include the portion that does not exceed the | 9 | | required minimum wage as compensation paid in Illinois to | 10 | | employees who are paid not more than the required minimum | 11 | | wage. | 12 | | (1) 25% for reporting periods beginning on or after | 13 | | January 1, 2020 and ending on or before December 31, 2020; | 14 | | (2) 21% for reporting periods beginning on or after | 15 | | January 1, 2021 and ending on or before December 31, 2021; | 16 | | (3) 17% for reporting periods beginning on or after | 17 | | January 1, 2022 and ending on or before December 31, 2022; | 18 | | (4) 13% for reporting periods beginning on or after | 19 | | January 1, 2023 and ending on or before December 31, 2023; | 20 | | (5) 9% for reporting periods beginning on or after | 21 | | January 1, 2024 and ending on or before December 31, 2024; | 22 | | (6) 5% for reporting periods beginning on or after | 23 | | January 1, 2025 and ending on or before December 31, 2025. | 24 | | The amount computed under this subsection may continue to | 25 | | be claimed for reporting periods beginning on or after January | 26 | | 1, 2026 and: |
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| 1 | | (A) ending on or before December 31, 2026 for | 2 | | employers with more than 5 employees; or | 3 | | (B) ending on or before December 31, 2027 for | 4 | | employers with no more than 5 employees. | 5 | | "Qualified employee" means an employee who is paid not | 6 | | more than the required minimum wage and has an average wage | 7 | | paid per hour by the employer during the reporting period | 8 | | equal to or greater than his or her average wage paid per hour | 9 | | by the employer during each reporting period for the | 10 | | immediately preceding 12 months. A new qualified employee is | 11 | | deemed to have earned the required minimum wage in the | 12 | | preceding reporting period. | 13 | | "Reporting period" means the quarter for which a return is | 14 | | required to be filed under subsection (b) of this Section. | 15 | | (j) For reporting periods beginning on or after January 1, | 16 | | 2023, if a private employer grants all of its employees the | 17 | | option of taking a paid leave of absence of at least 30 days | 18 | | for the purpose of serving as an organ donor or bone marrow | 19 | | donor, then the private employer may take a credit against the | 20 | | payments due under this Section in an amount equal to the | 21 | | amount withheld under this Section with respect to wages paid | 22 | | while the employee is on organ donation leave, not to exceed | 23 | | $20,833.33 $1,000 in withholdings for each employee who takes | 24 | | organ donation leave. To be eligible for the credit, such a | 25 | | leave of absence must be taken without loss of pay, vacation | 26 | | time,
compensatory time, personal days, or sick time for at |
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| 1 | | least the first 30 days of the leave of absence. The private | 2 | | employer shall adopt rules governing organ donation leave, | 3 | | including rules that (i) establish conditions and procedures | 4 | | for requesting and approving leave and (ii) require medical | 5 | | documentation of the proposed organ or bone marrow donation | 6 | | before leave is approved by the private employer. A private | 7 | | employer must provide, in the manner required by the | 8 | | Department, documentation from the employee's medical | 9 | | provider, which the private employer receives from the | 10 | | employee, that verifies the employee's organ donation. The | 11 | | private employer must also provide, in the manner required by | 12 | | the Department, documentation that shows that a qualifying | 13 | | organ donor leave policy was in place and offered to all | 14 | | qualifying employees at the time the leave was taken. For the | 15 | | private employer to receive the tax credit, the employee | 16 | | taking organ donor leave must allow for the applicable medical | 17 | | records to be disclosed to the Department. If the private | 18 | | employer cannot provide the required documentation to the | 19 | | Department, then the private employer is ineligible for the | 20 | | credit under this Section. A private employer must also | 21 | | provide, in the form required by the Department, any | 22 | | additional documentation or information required by the | 23 | | Department to administer the credit under this Section. The | 24 | | credit under this subsection (j) shall be taken within one | 25 | | year after the date upon which the organ donation leave | 26 | | begins. If the leave taken spans into a second tax year, the |
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| 1 | | employer qualifies for the allowable credit in the later of | 2 | | the 2 years. If the amount of credit exceeds the tax liability | 3 | | for the year, the excess may be carried and applied to the tax | 4 | | liability for the 3 taxable years following the excess credit | 5 | | year. The tax credit shall be applied to the earliest year for | 6 | | which there is a tax liability. If there are credits for more | 7 | | than one year that are available to offset liability, the | 8 | | earlier credit shall be applied first. | 9 | | Nothing in this subsection (j) prohibits a private | 10 | | employer from providing an unpaid leave of absence to its | 11 | | employees for the purpose of serving as an organ donor or bone | 12 | | marrow donor; however, if the employer's policy provides for | 13 | | fewer than 30 days of paid leave for organ or bone marrow | 14 | | donation, then the employer shall not be eligible for the | 15 | | credit under this Section. | 16 | | As used in this subsection (j): | 17 | | "Department" means the Department of Revenue. | 18 | | "Organ" means any biological tissue of the human body that | 19 | | may be donated by a living donor, including, but not limited | 20 | | to, the kidney, liver, lung, pancreas, intestine, bone, skin, | 21 | | or any subpart of those organs. | 22 | | "Organ donor" means a person from whose body an organ is | 23 | | taken to be transferred to the body of another person. | 24 | | "Private employer" means a sole proprietorship, | 25 | | corporation, partnership, limited liability company, or other | 26 | | entity with one or more employees. "Private employer" does not |
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| 1 | | include a municipality, county, State agency, or other public | 2 | | employer. | 3 | | This subsection (j) is exempt from the provisions of | 4 | | Section 250 of this Act. | 5 | | (Source: P.A. 101-1, eff. 2-19-19; 102-669, eff. 11-16-21; | 6 | | 102-700, Article 30, Section 30-5, eff. 4-19-22; 102-700, | 7 | | Article 110, Section 110-905, eff. 4-19-22; revised 6-1-22.)
| 8 | | Section 99. Effective date. This Act takes effect upon | 9 | | becoming law.
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