Unemployment Insurance Tax (FUTA/SUTA): Illinois

Federal law and guidance on this subject should be reviewed together with this section.

Author: Vicki M. Lambert, The Payroll Advisor

Summary

• The ABC Test is used to determine whether an individual is an employee entitled to receive unemployment benefits. See Determining Unemployment Tax Coverage.
• Illinois is a benefit ratio state. An employer's contribution rate is determined by multiplying the employer's benefit ratio for that calendar year by the adjusted state experience factor for the same year. See Contribution Rates; Experience Rating Method.
• Illinois' SUTA dumping law prohibits employers from illegally lowering their unemployment insurance tax rates. Violations of this law lead to substantial penalties. See SUTA Dumping.
• If certain criteria are met, two or more nonprofit organizations that have elected to reimburse benefits may file a joint application to establish a group account in order to share the cost of benefits paid on the basis of the wages paid by the organizations. See Joint or Combined Accounts.
• Employers must submit quarterly contribution and wage reports by the last day of the month following the end of each quarter. Certain employers must file electronically on a monthly basis. Multi-site employers are required to submit multiple worksite reports along with each quarterly contribution and wage report. See Quarterly Reporting Requirements; Multiple Worksite Reporting.
• An employer's UI account will not be relieved of charges for erroneous benefit payments under certain circumstances. See Benefit Overpayments.
• Employers must maintain and preserve certain payroll records for at least five years. See Recordkeeping Requirements.