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April 2015 - 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 experienced 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.

These rules:

  • 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.

Message to Taxnet filers regarding your Quarterly Unemployment Insurance (UI) Contribution and Wage Report (UI-3/40),

Thank you for using TaxNet to file your Employer’s Quarterly Contribution and Wage Report (UI-3/40).

This is a reminder that your quarterly UI 3/40 Contribution and Wage Report and payment are due as scheduled: Quarter ending March 31st, due April 30th, Quarter ending June 30th, due July 31st, Quarter ending September 30th, due October 31st and Quarter ending December 31st, due January 31st. Penalty and interest can be incurred if payment and report have not been transmitted to IDES timely as scheduled. Paying your contributions online through ACH Debit is a safe and convenient way to make your payment and receive confirmation of timely payment.

If you are paying by check, you can logon to TaxNet, select Unemployment Insurance, select Year and Quarter, Enter Payment Amount, Click on Next, Print Payment Coupon on display. Attach the payment coupon to your check and mail it to the address shown: IDES, P.O. Box 19300, Springfield, Illinois 62794-9300.

If you have questions, please call us at the Employer Hotline Unit at the toll-free number 800-247-4984, or e-mail us at DES.TaxnetAD@illinois.gov

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