Illinois Passes New Law Changing State Income Tax Withholding Requirement For Nonresidents.

The state of Illinois signed SB 1515 into law on August 26, 2019. It repeals the previous law pertaining to state individual income tax withholding requirements for out-of-state residents. Now, nonresidents who spend 30 days or more working in Illinois during the calendar year are considered to have been compensated in the state and are subject to Illinois income tax.

SB 1515 requires employers with nonresident employees working in the state to:

  • Maintain record of the number of days worked in-state by their nonresident employees, or
  • Have the nonresident employees submit a written statement that includes the number of days that they reasonably expect to spend working in the state during the year.

This law will be applicable to tax years ending on or after December 31, 2020.