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July 16, 2019
2019-1270

Illinois voters to decide whether there should be a graduated income tax system or if the flat-rate method should continue

Illinois Senate Joint Resolution (SJR) Constitutional Amendment 1, passed by the Illinois House and Senate, will place a referendum on the November 2020 ballot giving voters the opportunity to replace the current flat income tax with a graduated income tax.

Governor Pritzker signed into law SB 687 (PA 101-0008), which would establish a graduated income tax rate table, effective January 1, 2021, if the constitutional amendment is approved by voters in the 2020 elections. (News release, governor's office.)

The institution of a graduated income tax system is part of the governor's "fair tax" proposal, under which the governor expects that "97? of taxpayers will pay the same or less and only those making $250,000 will pay more." (News release, governor's office.)

Ernst & Young LLP

At the beginning of the 2019 tax year, the Illinois Department of Revenue issued Publication IL-700-T, Illinois Withholding Tax Tables, to be used effective with wages paid on and after January 1, 2019, reflecting the flat income tax rate of 4.95%. (EY Payroll Newsflash Vol. 20, #004, 1-3-2019.)

As we reported previously, the 2017 Illinois Budget bill SB 9 (Public Act 100-0303) increased the flat personal income tax rate from 3.75% to 4.95% effective July 1, 2017. The tax increase was the result of the House of Representatives overriding Governor Rauner's veto of the budget bill, thus ending a two-year budget stalemate. (EY Payroll Newsflash Vol. 18, #118, 7-10-2017.

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Contact Information
For additional information concerning this Alert, please contact:
 
Workforce Advisory Services - Employment Tax Advisory Services
   • Kenneth Hausser (kenneth.hausser@ey.com)
   • Debera Salam (debera.salam@ey.com)

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EY Payroll News Flash

 

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