End-to-end Illinois employer payroll compliance workflow covering IL-941 quarterly withholding, UI-3/40 SUTA contributions, Illinois Secure Choice auto-enrollment, Chicago Fair Workweek predictive scheduling, and annual W-2 reconciliation for tax year 2025.
Determine whether the employer is already registered with Illinois DOR for withholding and with IDES for UI. Gather entity type, headcount, location (Chicago, Cook County, or elsewhere), industry, and whether a qualified retirement plan is in place. Confirm federal EIN is active, since Illinois piggybacks on federal registration.
Confirm every worker engaged is properly classified as an employee (not an independent contractor) under the Illinois UI Act ABC test (820 ILCS 405/212). Collect IL-W-4 from each employee to determine withholding allowances. Flag any Indiana-border employees (no IL/IN reciprocity) and any residents of Iowa, Kentucky, Michigan, or Wisconsin who may file IL-W-5-NR to stop Illinois withholding.
Compute Illinois income tax withholding each pay period using Booklet IL-700-T percentage method: gross wages minus $2,850 annual allowance (prorated by pay period) times 4.95%. Illinois uses 4.95% on all wages including supplemental pay — there is no separate supplemental rate. Determine the employer's deposit frequency (monthly if lookback withholding under $12,000; semi-weekly if over $12,000) and remit via Form IL-501 or MyTax Illinois.
File IL-941 (Illinois Withholding Income Tax Return) electronically via MyTax Illinois by the last day of the month following each quarter-end (April 30, July 31, October 31, February 2 for Q4). Simultaneously file Form UI-3/40 (Employer's Contribution and Wage Report) with IDES for SUTA: 2025 taxable wage base is $13,590 per employee; new employer rate is 3.95% (non-construction) or 6.45% (construction); experienced-employer rates range 0.85%–8.65%.
Determine if the employer is subject to the Illinois Secure Choice Savings Program mandate (820 ILCS 80/): 5+ Illinois employees in every quarter of the prior year, in business 2+ years, and no qualified retirement plan offered. If subject, confirm registration at employer.ilsecurechoice.com, employee information packets sent within 30 days of hire, and payroll deductions remitted to Vestwell within 7 business days of each payroll at the default 5% Roth IRA rate (or employee-elected rate).
If the employer has employees in Chicago or Cook County, assess applicability of the Chicago Paid Leave and Paid Sick Leave Ordinance (80 hours combined per year effective July 1, 2024), Cook County Earned Sick Leave Ordinance, and Chicago Fair Workweek Ordinance (100+ employees globally, 50+ in Chicago, covered industries — 14-day advance schedule posting, predictability pay for changes, right-to-rest at 1.25× for shifts starting within 10 hours). Illinois Paid Leave for All Workers Act (PLAWA, 820 ILCS 192/) applies statewide at 40 hours per year for employers outside Chicago and Cook County.
Reconcile the four quarterly IL-941 totals against total Illinois wages and withholding on W-2s. File W-2 copies electronically with Illinois DOR via MyTax Illinois by January 31. File 1099s with Illinois withholding by March 31. The Q4 IL-941 (due February 2, 2026) serves as the annual IL-W-3 reconciliation — there is no separate IL-W-3 form. Confirm total SUTA wages on UI-3/40s reconcile to W-2 Box 16 wages net of wages above the $13,590 per-employee wage base.
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