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New Hire Paperwork and Reporting for Illinois

Everything you need to know about new hire paperwork compliance and reporting in Illinois.

July 24th, 2023

The hiring process for companies can be a bit intimidating. With all of the paperwork you have to fill out, along with the legal process that you have to follow, it can be a lot to keep track of.

In Illinois, over 6.2 million employees are working throughout the state. Whenever one of these employees starts a new job, there is a lot of paperwork and state reporting that needs to be done.

What new hire paperwork in Illinois do you need? What sort of legal compliance do Illinois companies have to stay on top of?

This guide will answer those questions and more.

I-9 Form

One of the most important forms you have to give to a new employee that walks into your office is an I-9 form. This employment eligibility verification form verifies that the person trying to work for your company is legally allowed to work in the United States.

Employees start by filling out standard information such as their first and last name, home address, email address, telephone number, and social security number.

Next, the form will ask the employee to provide their status in the United States. The four options they have are a citizen of the United States, noncitizen national, alien legally allowed to work here, and lawful permanent resident.

If the employee is an alien, they must provide additional information. This can be either a registration number or a foreign passport number and the country that the passport came from.

This happens more frequently than you may think. In an average year, the United States gives out over two million work-eligible visas.

For companies, this form protects them and ensures that they are hiring people that are legally allowed to seek employment. For employees, this form could verify that they are meeting the obligations of their status in this country, such as if they are supposed to be an alien on a working visa.

Once this form is done, you can move on to the next one.

W-4 Form

The next form that you are going to have to give a new employee is the W-4 form. This is the employee's withholding certificate.

The main objective of this form is to have an employee's tax withholdings be as accurate as possible. This can benefit both the company and the employee.

A company has to match whatever contributions an employee makes on their taxes, such as Social Security and Medicare. So this form helps the company get a clearer picture of how much money they are going to have to match.

As for the employee, this can benefit them because if a company gets an employee's tax withholdings wrong, there could be consequences. Either the employee can end up with too little money every paycheck, or the employee can end up owing money on their taxes at the end of the year.

Filling out this form ensures the employee has the proper withholdings based on salary and household circumstances.

First, the form asks employees to fill out standard information such as their name, address, and social security number. Then, the form will ask the employee for their filing status. An employee can be single, married but filing separately, married filing jointly, or head of household.

Then, the form will ask employees additional questions about their personal status. It asks about any other jobs the employee has, how much income they get from those other jobs, any eligible dependents they have, and any other deductions to which they may be entitled.

All of this information can help give companies and the IRS a good idea of what part of an employee's salary should be withheld for tax purposes.

IL-W-4

Something more specific to Illinois that you are going to have to give a new employee is the IL-W-4 form. This is essentially Illinois' version of the W-4 form.

The state wants companies to determine how much they should hold from an employee's salary for state tax purposes. There will be some different information required for this compared to the federal W-4 form.

The first part of the form is determining the dependent situation. Illinois wants to know if anyone can claim the employee as a dependent and if the employee can claim their spouse as a dependent. If they answer yes to either of those questions, they simply have to check those boxes.

Another thing Illinois wants to determine is what type of tax allowances certain employees have. An example is if the employee or their spouse is 65 or older. The state will also ask if the employee or their spouse is legally blind.

If they have any of these allowances, they have to check them off and fill out how many allowances they are going to claim.

W-9 Form

If you are working for a company that hires independent contractors, you are likely going to have to give those independent contractors this form. The purpose of this W-9 form is to remain legally compliant as a company. Essentially, you are giving people this form so that you can collect their tax information.

So, what does this form require employees to fill out? It starts with the basics, such as a name and address. If they have a business name, they should include this as well.

Then, they have to fill in either a social security number or an employee identification number. After this, they simply need to sign the form.

New Hire Reporting

As a company, there is some legal compliance that you are going to be expected to stay up to date on. One of these things is reporting your employee to the appropriate organization.

In Illinois, that means that every time a company hires a new employee, they have to report that new employee to the New Hire Reporting Program. Companies have 20 days from when the new employee is hired to report them.

However, this may not be limited to just new employees. Let's say your company hired an employee in the past. For whatever reason, it did not work out before, but your company decided to hire this employee back.

In that situation, your company still has to report the employee to the New Hire Reporting Program within 20 days of hiring them. In the eyes of this program, it is essentially like hiring a brand new employee, so you have to submit the paperwork all over again.

Illinois State Income Tax

In Illinois, the state income tax is very simple. For every employee in Illinois, the state income tax is 4.95%.

This contrasts with the majority of states because most other states create tax brackets for people that make more to contribute a higher percentage of their income. However, for businesses, this can simplify the process of withholding state taxes because they simply have to take the same percentage of salary out for every employee.

Unemployment Insurance

There may come a period when your company either has to lay an employee off or fire them. If this happens, this can turn that person's whole world upside down. For some people, they could be left wondering how they are going to survive without a paycheck.

This is where unemployment comes in. This is designed to help provide temporary money for those between jobs.

As a company in Illinois, it is your responsibility to do your part for unemployment. That means that you are going to have to contribute to unemployment insurance.

The amount that you will have to contribute depends on your company's circumstances. There is both a minimum and maximum contribution percentage in Illinois to unemployment insurance.

What happens is unemployment gives that employee a certain percentage of the wages they had at your company before they got laid off or fired. The tax your company pays towards this helps fund this and allows employees to receive the help they need during a tough time.

Final Thoughts

These are some of the most crucial things you need to know about new hire paperwork in Illinois. At the end of the day, the most important forms that you are going to have to submit include the I-9, W-4, IL-W-4, and W-9 forms.

Once these are complete, your company has to keep up with legal compliance, such as state income taxes, reporting requirements, unemployment insurance, and more.

Do you need help keeping up with your paperwork and legal compliance for new employees? Take a look and see how GoCo can help you conquer your onboarding and compliance!

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