How to Complete Illinois Form UI-1: Four Steps, Filing, and Appeals

Illinois Form REG-UI-1, the Report to Determine Liability, is how a new employer registers with the Illinois Department of Employment Security to establish whether the business owes quarterly unemployment insurance contributions. You must file it within 30 days of starting business operations in Illinois.¹ The fastest route is MyTax Illinois at mytax.illinois.gov, which processes applications in about one to two business days. Paper filings go to the Illinois Department of Revenue as an attachment to Form REG-1 and take four to six weeks.²

Do You Actually Have to File

Having employees in Illinois does not automatically make you a liable employer. State law sets wage and workforce thresholds, and crossing any one of them triggers the filing obligation.

Most businesses hit liability one of two ways: paying at least $1,500 in total wages during any single calendar quarter in the current or preceding year, or employing at least one person for any part of a day in 20 or more separate calendar weeks during that same period.³ The weeks do not have to be consecutive, and it does not have to be the same person each week.

Three categories have their own thresholds:

Agricultural employers become liable after paying $20,000 or more in cash wages for farm labor in any calendar quarter, or employing 10 or more agricultural workers for at least 20 weeks in a calendar year.⁴
Domestic service employers must register once they pay $1,000 or more in cash wages for household work in any calendar quarter.¹
Nonprofits exempt under Section 501(c)(3) use a separate standard: four or more employees for 20 weeks within a year. These organizations may also elect to reimburse the state for actual benefits paid to former employees rather than pay quarterly contributions.

If your business is already liable under the Federal Unemployment Tax Act in the current or prior year, that generally establishes Illinois liability as well, and the form asks you to report it.

What to Have Ready Before You Start

Missing any of these will stall the registration:

Federal Employer Identification Number (FEIN) from the IRS.
Legal business name and any DBA.
Primary business address and, if different, the Illinois location where work is performed.
NAICS code for your primary business activity. The form directs you to the Bureau of Labor Statistics website if you need to look yours up.¹
Date you first employed workers in Illinois.
Date of your first Illinois payroll (a separate field).
Entity formation details. Corporations need the date and state of incorporation; LLCs need the date and state of organization plus the federal tax treatment of the managing member.

One point of confusion worth clearing up: REG-UI-1 does not ask for Social Security Numbers of owners, partners, or corporate officers. SSN information belongs on the separate UI-1 S&P succession form, which only applies if you acquired an existing business.

Walking Through the Four Steps

Step 1: Business Information

Enter the legal business name, DBA, primary address, secondary Illinois address, phone, email, and FEIN. If IDES previously assigned you an employer account number through a prior business, enter that too. Then select the organization type. Options include sole proprietor, partnership, C-corporation, S-corporation, LLC (with sub-options for tax treatment), government entity, trust or estate, and others.¹

Step 2: Entity Information

Describe your primary Illinois business activity, principal product or service, and your top two products or services by percentage of sales. Enter your NAICS code. The remaining questions depend on entity type and ask whether anyone outside the owner group performs services for the business. For corporations, the question is whether any compensation (including dividends) has been paid to officers. For sole proprietors, the question is whether anyone besides you, your spouse, your parent, or your child under 18 works for the business. Answer based on the actual working arrangement, not just what a contract says, because these answers tell IDES who counts as a covered employee. At the bottom of Step 2, enter the date you first employed workers in Illinois and the date of your first Illinois payroll.¹

Question 18 asks whether you acquired any portion of your Illinois business through a purchase, reorganization, or entity change. If yes, you also need to complete Form UI-1 S&P and attach it.

Step 3: Liability Information

This is one question: have you incurred FUTA liability during the year you began employing workers in Illinois, or during the prior year? A “Yes” answer generally establishes state liability automatically.

Step 4: Additional Liability Information

Step 4 applies only to domestic service employers, agricultural employers, and nonprofit organizations. Each category answers questions tied to its own threshold. If none of those categories describe your business, skip the step entirely.¹

Submitting the Form

Online Through MyTax Illinois

Go to mytax.illinois.gov and click “Register a New Business (Form REG-1).” The REG-UI-1 information is built into that integrated registration. Processing takes about one to two business days,² and it is the route IDES recommends on the form itself.

By Mail

On paper, complete REG-UI-1 and attach it to Form REG-1, the Illinois Business Registration Application. Mail the package to:

Central Registration Division
Illinois Department of Revenue
PO Box 19030
Mail Code 3-222
Springfield, IL 62794-9030¹

Paper processing takes four to six weeks on a first-come, first-served basis.² The mailing address is the Department of Revenue, not IDES; Revenue handles the combined REG-1 registration and routes the unemployment portion to IDES.

What Happens After You File

Once IDES processes the registration and determines you are liable, you receive an employer account number used for all future tax filings and benefit charge notices. The determination notice also includes your initial contribution tax rate. New employers without an experience history get a standard entry-level rate; the state adjusts rates annually based on each employer’s claims history. The taxable wage base for 2026 is $13,271 per employee, so contributions are owed only on the first $13,271 in wages paid to each worker during the calendar year.⁵

After you have an account number, you must file quarterly Contribution and Wage Reports (Form UI-3/40) reporting the wages paid during each quarter. Failure to file these quarterly reports triggers penalties.⁶

Registering in Illinois does not replace your federal obligation. Most employers also owe FUTA tax at a standard rate of 6.0% on the first $7,000 in wages per employee. Paying state contributions on time and in full earns a credit of up to 5.4%, reducing the effective FUTA rate to 0.6%. Falling behind on Illinois contributions can jeopardize that credit and raise your federal bill substantially.

If You Bought or Restructured an Existing Business

If you purchased an Illinois business, took one over, or changed the entity structure of an existing one, file Form UI-1 S&P (Report to Determine Succession) along with REG-UI-1. The succession form asks for information on both the previous and current owners, including the predecessor’s Illinois UI account number if known, the predecessor’s FEIN, the date of acquisition, and the nature of the transaction (purchase, merger, reorganization, foreclosure, and so on).⁷

IDES uses this to decide whether the predecessor’s experience rating transfers to you. The transfer can help or hurt. A predecessor with few former employees collecting unemployment passes along a lower rate; a heavy claims history sticks you with a higher one. If you acquired only part of the business, the form asks what percentage of operations and assets came over, which affects how much of the experience rating follows.

Penalties for Late or Missing Registration

The 30-day deadline is not optional. New businesses that fail to register within 30 days of starting operations risk penalties and back-assessed contributions with interest.⁶

Employers who willfully fail to pay contributions with intent to defraud face a penalty equal to 60% of the unpaid amount, with a minimum of $400. Penalties for failing to file quarterly wage reports on time range from $50 to $5,000, scaled to total wages reported. IDES waives this penalty for a first-time late filer whose total quarterly contributions owed are under $500, if the employer files within 30 working days after receiving the delinquency notice. The Director may also waive penalties for good cause.⁸

Appealing a Liability Determination

If IDES determines your business is liable and you disagree, perhaps because you believe your workers are independent contractors or your wages fell below the threshold, you have the right to appeal. File within 30 days of the mailing date of the determination notice. If the appeal is timely, IDES schedules a hearing and notifies all parties.⁹

Missing the 30-day window effectively makes the determination final. IDES counts the mailing date, not the date you received the notice, so the clock may already be running when the letter reaches you. If you plan to contest liability, move quickly and include a clear written explanation of why the determination is wrong.

1
Illinois Department of Employment Security. IDES Form REG-UI-1 Report to Determine Liability
2
Illinois Department of Revenue. Business Registration
3
Illinois General Assembly. Illinois Code 820 ILCS 405/205 – Employer
4
FindLaw. Illinois Code 820 ILCS 405/211.4
5
Illinois Department of Employment Security. 2026 Historical Rate Chart
6
Illinois Department of Employment Security. Employer Tax Information
7
Illinois Department of Employment Security. Report to Determine Succession UI-1 S&P
8
Illinois General Assembly. Illinois Code 820 ILCS 405 – Unemployment Insurance Act
9
Illinois Department of Employment Security. Benefit Rights Information for Claimants and Employers