Author: Rena Pirsos, XpertHR Legal Editor

XpertHR has updated its Illinois Unemployment Insurance Tax content to include guidance issued by the Illinois Department of Employment Security (IDES) on how to implement the new monthly electronic unemployment insurance (UI) tax and wage reporting requirement that will be phased in starting January 1, 2013. Employers will continue to submit quarterly tax and wage reports, plus eight additional monthly reports due on the last day of the following month.

Electronic monthly reporting will be gradually phased in based on the number of employees an employer has on certain dates, as shown in the following schedule:

  • January 1, 2013 - 250 or more employees;
  • July 1, 2013 - 100 or more employees;
  • January 1, 2014 - 50 or more employees; and
  • July 1, 2014 - 25 or more employees.

Employers must file monthly reports using TaxNet, the IDES's online tax filing application. Those already registered can file using their existing account. Those not yet registered may do so directly on TaxNet. The guidance notes that TaxNet will only accept a comma separated (.csv) plain ASCII text format file for monthly wage reports. A file can contain a single employer or multiple employers. No manual entry option will be available.

More information and the electronic file format specifications can be found in the File Format Guide for Monthly Wage Reporting. Employers also may call the IDES TaxNet Hotline, toll free, at (866) 274-5697. Employer emails are also accepted at DES.TaxnetAD@illinois.gov.

Waiver Requests

The IDES has adopted emergency regulations which allow employers to request waivers from the electronic reporting requirement and penalties. To get a waiver from electronic filing, an employer must show that the Internal Revenue Service (IRS) has waived the electronic reporting requirement, or would have waived it if it had been applicable.

Penalties will conditionally be waived on the following basis:

  • For January and February, and April and May 2013 for employers that had more than 25 but fewer than 250 employees in 2012.
  • For July and August, and October and November 2013 for employers that had more than 25 but fewer than 100 employees in 2012.
  • For January and February, and April and May 2014 for employers that had more than 25 but fewer than 50 employees in 2012.

The IDES will waive a penalty that has been conditionally waived for the first two months of a calendar quarter only if the employer submits the report required for the third month of the quarter on time.

56 Ill. Adm. Code §§2730, 2732, 2760, 2765.

Additional Resources

Payroll > Unemployment Insurance Tax (FUTA/SUTA): Illinois > Monthly Reporting Requirement

Illinois Requires More Frequent Electronic UI Wage and Tax Reporting in 2013