Monthly Wage Reporting
Relief for Eligible Employers from Penalties and Interest in Wage Reporting
To fight theft and abuse of public assistance programs such as Medicaid and unemployment insurance, Illinois lawmakers required certain employers to submit wage reports on a monthly basis. Previously, all employers were required to report wage information quarterly. Electronic and monthly wage reporting have the potential to stop improper payments before they are issued and save Illinois taxpayers hundreds of millions of dollars each year. This savings helps reduce unemployment insurance tax rates.
The Department adopted emergency rulemaking, agreed to by the business and labor communities, which expanded the reporting requirements to more employers starting in 2013, although the monthly reporting was not fully phased in until July 2014.
Though the Department informed employers through direct mail, email, media reports and trade groups of this emergency rule change, some employers genuinely misunderstood the implementation schedule for the expanded reporting requirements and experience problems transitioning to electronic and monthly reporting despite their good faith efforts.
To address this issue, the Department has implemented new rules to help employers with wage report submission.
- Retroactively align the electronic and monthly reporting requirement schedules to match. This will remove penalties and interest employers incurred as a result of confusion over the electronic reporting implementation schedule.
- Waive up to the first two quarters’ worth of penalties, along with any related interest, for late monthly wage reports as long as the employer timely submitted quarterly reports for that same period.
Employers will not have to request waivers. The Department will automatically remove the penalties and interest to the extent the new rules permit. The Department’s Information Technology division is expected to implement these changes within the next six months. In the interim, employers will continue to see these penalties and interest on their quarterly Statement of Account. Once the system changes are complete, the Department will notify Employers of any penalties and interest that were waived, removed, or credited.
Employers who have already paid penalties and interest will be issued a credit, which will apply towards future quarterly contributions. Employers that have requested a waiver of a penalty for which the new rules do not appear to apply will still have their waiver request processed to determine if there is some other basis for a waiver. The employer will have the right to appeal any unfavorable decision.
To expedite the removal of the penalties and interest, employers should use Taxnet, or the payment coupon provided by the Department, to submit quarterly contribution payments. We appreciate your patience and help in fighting Medicaid and unemployment insurance benefit fraud. For further information, please call the Employer Hotline at (800) 247-4984.
The Medicaid Reform "SMART" Act was designed to root out waste, fraud and abuse in the State's Medicaid program. It requires monthly wage reports from employers who are required to submit their contribution and wage reports electronically.
Effective July 2014
Pursuant to Public Act 97-0689, employers with a cumulative total of 25 or more employees in the prior calendar year are required to submit monthly wage reports electronically. Employers will continue to submit quarterly contribution and wage reports, and submit eight additional monthly wage reports.
*Please note that failure to file your employer’s monthly wage report electronically, will result in the assessment of a penalty.
Phase in Period
Effective Dates (based on # of Employees)
250 or more - January 2013
100 - 249 - July 2013
50 - 99 - January 2014
25 - 49 - July 2014
Monthly wage filing must be done via TaxNet, the Department's online tax filing / wage reporting application. Employers that are already registered on TaxNet can file using their existing TaxNet account.
Recommended Browser: The TaxNet web application is best viewed with Internet Explorer
TaxNet will only accept a comma separated (.csv) plain ASCII text format file for the monthly wage report. A file can contain a single employer or multiple employers.
Please note: There will NOT be a manual entry option for the monthly wage reports.
File Format Guide
Call the IDES TaxNet Hotline, toll free at (800) 247-4984 for TaxNet related questions, or contact IDES in writing