When will Illinois' higher income tax affect you? - WSIL-TV 3 Southern Illinois

When will Illinois' higher income tax affect you?

Posted: Updated:

WSIL -- With the new income tax rate taking effect July 1, when you'll see the impact depends on your employer.

The rate jumped from 3.75 percent to 4.95 percent as part of the budget lawmakers approved earlier this month.

Because employers withhold state taxes from paychecks, Amanda Majewski, director of payroll services at HireLevel, said managers have to update their accounting software to pull more money out.

"If a company is doing their own internal payroll, if they didn't think to update their spreadsheets or whatever for this rate to go from 3.75 to 4.95, then as an employee, when I go to file my W-2, I'm going to owe the state of Illinois taxes because I underpaid based on the new rate," Majewski said.

Majewski said she's waiting on new calculations from the Illinois Department of Revenue before she makes changes for the companies she does payroll for with HireLevel.

If you're not sure about when or if your company will pull more money from your check, Majewski said you should ask your employer and check with your accountant or CPA.

If you decide to have the extra money taken from your check, Majewski said you have to file a new W-4 form with your employer. Otherwise, you might owe the state some money come tax time.

Most Popular

Powered by Frankly
All content © Copyright 2000 - 2018 WSIL. All Rights Reserved. For more information on this site, please read our Privacy Policy, and Terms of Service, and Ad Choices.