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Who is required to withhold Illinois Income Tax and register as an Illinois withholding agent?
- employee compensation (i.e., wages and salaries, bonus, overtime, and commission pay) paid in Illinois usually reported to a payee on Form W-2;
- non-wage income such as pensions, annuities, employment income, and sick pay that you have agreed to voluntarily withhold, usually reported to a recipient on Form 1099;
- gambling or lottery winnings in Illinois paid to an Illinois resident or qualifying non-resident, usually reported to a payee on Form W-2G; or
- the purchase of the rights to Illinois lottery winnings, reported to the purchaser on Form 1099-MISC.
- Register electronically using MyTax Illinois.
- Complete and mail Form REG-1, Illinois Business Registration Application.
- Visit a regional office.
Generally, you must withhold Illinois Income Tax if you are required to withhold (or have a voluntary agreement to withhold) federal income tax from payments you make for
See Publication 130 for more information.
If you are required to or voluntarily withhold Illinois Income Tax for your Illinois employees or payees, you must register with IDOR and tell us the date your Illinois payroll will begin. To register your business, you may choose one of the following options:
Note: You may register for state tax withholding and unemployment insurance at the same time by registering electronically via MyTax Illinois, visiting a regional office, or completing both Form REG-1, Illinois Business Registration Application, and Form REG-UI-1, Report to Determine Liability Under the Unemployment Insurance Act.
Note: The State of Illinois Business Page explains employers' requirements for unemployment insurance, workers' compensation, nondiscrimination, etc.