Electronic Filing for Monthly Wage Report, Quarterly Contribution and Wage Report, and Payments via TaxNet
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.
Effective July 2014 Monthly Wage Report
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 (news release).
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
Effective 3rd Quarter 2013 Quarterly Contribution and Wage Report (UI-3/40)
The Rules of the Illinois Department of Employment Security (56 Ill. Code 2760.140) have been changed to require employers with 25 or more employees during the prior calendar year to file their Quarterly Contribution and Wage Report (UI-3/40) electronically.
Magnetic media, such as, diskette, CD or cartridge will no longer be approved filing methods for Quarterly Reports after the second quarter of 2013.
The ONLY approved filing methods for Quarterly UI 3/40 Reports are:
- TaxNet Manual Entry
- TaxNet File upload
- TaxNet File import
- Fed/State Employment Taxes Program (FSET) - a program for large employers and payroll companies to electronically file and pay both their federal and Illinois employment taxes.
- Zero Wage Telefiling at 1-800-793-6860
*Please note that failure to file your employer’s (monthly & quarterly) contribution and wage report (UI-3/40) electronically, will result in the assessment of a penalty.
Report Filing Extension Requests
NOTE - If you are unable to file your quarterly and/or monthly reports in time, and would like to request an extension you may email your request to the following address: DES.TaxNetExtensions@Illinois.gov
- QUARTERLY EXTENSIONS: If your extension request is granted, you will have an additional 30 days to file your quarterly report.
- MONTHLY EXTENSIONS: If your request is granted, you will have an additional 15 days to file your MONTHLY report.
Requests for quarterly and/or monthly filing extensions must be received on or before the filing due date.
What are some employer UI tax responsibilites?
Steps to Enroll
IDES offers employers different options to pay UI taxes electronically:
- Illinois TaxNet: You can file your report and pay via ACH Debit by using this secure online application.
- New TaxNet users: see registration instructions prior to signing up
- The taxNet website is best viewed with Internet Explorer
- Electronic Funds Transfer via Automated Clearing House: this service assures your payment will take only 24 hours to process and the funds will clear your bank account the next day. Please call the TaxNet Hotline to set up your Electronic Funds Transfer
- Pay bill with your Visa or Master card: IDES accepts Master card, Visa, Discover and American Express credit and debit card payment via the Paybill website.