Illinois has implemented a permanent personal income tax hike, retroactive to July 1, 2017. The tax rate has increased from 3.75% to 4.95%. As a result, employees may see this impact their payroll checks within the next week or two as their net check will now be lowered. Employers who withhold Illinois tax from their employees will need time for their payroll system (Quickbooks, Paychex, ADP, etc) to update with the new Illinois income tax withholding table. For taxpayers that do not withhold Illinois income tax from their paychecks, consider the tax hike when calculating your third quarter estimate due in September.
If you have any questions regarding how this tax rate change will impact your payroll processing, contact our Accounting Solutions Group.