Illinois' New Budget: What It Means for Employers
By Jim Griffin, JD, Employment Counsel
Published July 11, 2017
On July 6, 2017, the Illinois General Assembly overrode Governor Rauner’s veto to pass a state budget for the first time in more than two years. The legislation was passed as pressure mounted due to the state amassing over $15 billion in unpaid bills and heading towards a “junk” credit rating.
The passage of the budget is a welcome respite for the many Illinois nonprofits that were unexpectedly forced to operate without state funds throughout the budget stalemate. However, included in the budget legislation are several tax increases, including an individual income tax increase from 3.75% to 4.95%, which is retroactive to July 1, 2017.
The Illinois Department of Revenue has posted a number of informational bulletins pertaining to the tax increases, including one for employers and payroll providers that provides guidance on required payroll-related changes. Employers should work closely with their tax advisors and/or payroll providers to ensure that withholding tax rates are adjusted to reflect the new tax rates. You can also visit the Illinois Department of Revenue’s website for updates and the Department’s contact information.