Withholding Income Tax for Household Employees
You are an employer of a household employee if you:
- employ a person who does household work in or around your home,
- control what work is done, and
- control how the work is done (e.g., provide the necessary equipment, supplies, or tools to do the job).
If the worker controls how the work is done, the worker is not your employee. This person usually provides his or her own tools and offers services to the general public in an independent business. If an agency provides the worker and controls what work is done and how it is done, the worker is not your employee.
Do I need to withhold Illinois Income Tax?
Generally, you must withhold Illinois Income Tax for your Illinois employee if:
- you withhold federal income tax, or
- you and your employee enter into a voluntary withholding agreement. (We do not require a separate agreement for payments covered by a federal voluntary withholding agreement.)
How do I report and pay the Illinois Income Tax I withhold?
If you employ household employees and you are eligible to file federal Schedule H (Form 1040), Household Employment Taxes, you may file your Illinois withholding tax annually on Form IL-1040, Illinois Individual Income Tax, Line 20. For more detailed information, see Pub-121, Illinois Income Tax Withholding for Household Employees.
If you do not file annually on Form IL-1040, Line 20, you must file Form IL-941, Illinois Withholding Income Tax Return, to report and pay the income tax you withheld. See Pub-131, Withholding Income Tax Filing and Payment Requirements, to determine how often you are required to report and pay withholding tax. You must register with us (the Illinois Department of Revenue) online or by completing Form REG-1, Illinois Business Registration. For new registrants, Form IL-941 is required quarterly and payments are required monthly.
Note: If you already file IL-941 and you would like to convert to the annual IL-1040, Line 20 option, you must call us first at 217 785‐3707 to close your IL‐941 account. If you do not, you may be subject to penalties and collection action.