What Is Form W-6 for Illinois Withholding Exemption?

Form IL-W-4, Employee’s and other Payee’s Illinois Withholding Allowance Certificate, is a state document that allows an employee to adjust their Illinois income tax withholding. A primary function of the form is to allow eligible employees to claim a full exemption, which stops state income tax from being taken from their paychecks. This form instructs an employer on how much Illinois tax to withhold and is entirely separate from the federal Form W-4 used for federal income tax.

While the Illinois Form IL-W-4 serves various purposes, claiming a full exemption is reserved for a small portion of the workforce. Filing for an exemption certifies that an employee meets specific criteria freeing them from state withholding. Incorrectly claiming an exemption can lead to a significant tax bill and penalties at the end of the year.

Who Can Claim Exemption from Illinois Withholding

To use Form IL-W-4 to claim an exemption from Illinois withholding, an employee must satisfy two conditions. The first requirement is that the employee had no Illinois income tax liability in the previous tax year. This means that after all adjustments and credits on the prior year’s state tax return, the final tax amount due was zero. An employee who received a full refund of any Illinois tax withheld in the previous year meets this condition.

The second condition is that the employee must also reasonably expect to have no Illinois income tax liability for the current tax year. This projection requires an individual to estimate their total income for the year and compare it against their expected exemptions and deductions. If the total anticipated income is less than the standard exemption and other deductions, their taxable income will be zero. Both of these conditions must be met to legally claim the exemption.

Having no tax liability applies to individuals with very low earnings. For example, a student working a temporary summer job whose total annual income falls below the personal exemption amount would have no tax liability. A part-time worker whose yearly earnings are minimal might also qualify. It is not enough to simply expect a refund; the actual tax liability must be zero for both the prior and current years.

An employee’s personal situation can change during the year, which could affect their eligibility. If an individual who claimed an exemption receives a raise, works more hours, or secures a second job, their total income might rise above the threshold for zero tax liability. In such a case, the employee is required to revoke their exemption within 10 days by submitting a new Form IL-W-4 to their employer to begin withholding.

How to Complete Form IL-W-4

The Form IL-W-4 can be downloaded from the Illinois Department of Revenue’s official website. The top section is for the employee’s details, including their full name, current home address, and Social Security Number. This information must be accurate to prevent processing issues.

Next, you will enter your employer’s name and address, which can be found on a pay stub. To claim an exemption, you must check the box on the form certifying that you meet the two conditions for exemption discussed previously.

The final step is to sign and date the form. Your signature is a legal declaration made under penalty of perjury that the information you have provided is true and that you meet the criteria for the exemption. An unsigned form is not valid.

Submitting and Maintaining Your Form

Once the Form IL-W-4 is filled out and signed, it must be given directly to your employer. Do not send this form to the Illinois Department of Revenue; it is an internal document for your employer’s records. After your employer processes the form, they will adjust your withholding—or cease it if you claimed an exemption—on subsequent paychecks.

An Illinois Form IL-W-4 does not expire and remains in effect until you submit a new one. You are required to file a new form if your financial or personal situation changes in a way that alters the number of allowances you can claim or your eligibility for an exemption.

If an employee never provides a Form IL-W-4, the employer is legally required to withhold Illinois income tax as if the employee were single with zero withholding allowances. This is the highest withholding rate and is designed to prevent a large tax debt from accumulating.

Knowingly submitting a false Form IL-W-4 by claiming an exemption when you do not meet the required conditions can lead to penalties. These include the requirement to pay the back taxes owed, in addition to substantial penalties and interest charges assessed by the state.