How to Fill Out and File Form IL-941: Illinois Withholding Tax Return

Form IL-941 is the quarterly return Illinois employers use to report the state income tax withheld from employee wages, and it must be filed electronically through MyTax Illinois by the last day of the month following each calendar quarter.¹ Illinois withholds at a flat rate of 4.95%, and the return reconciles what you withheld during the quarter against the IL-501 deposits you already sent in.²

Who Has to File

Any person or business that maintains an office or does business in Illinois and is required to withhold federal income tax under IRC sections 3401 through 3404 must also withhold Illinois income tax on compensation paid in the state. That covers corporations, partnerships, sole proprietorships, and nonprofits with paid workers. Non-resident employees who work primarily in Illinois still get withheld on. Compensation not subject to federal income tax withholding is also exempt from Illinois withholding, even where FICA applies.³

File every quarter, even when you paid no wages and withheld nothing. A zero return signals that the business is still active with no taxable payroll for the period. Skipping a quarter can trigger a nonfiling notice.⁴

2026 Filing Deadlines

The IL-941 is due by the last day of the month after each calendar quarter closes.⁵ For 2026:

Q1 (January–March): April 30, 2026
Q2 (April–June): July 31, 2026
Q3 (July–September): November 2, 2026
Q4 (October–December): February 1, 2027

The Q3 and Q4 dates shift because October 31, 2026, falls on a Saturday and January 31, 2027, falls on a Sunday.⁶

Before You Start

Have your Federal Employer Identification Number, your payroll records for the quarter (broken down by day and month), and the total of any IL-501 deposits you already made during the period.⁶ Report withholding by the date you issued payroll, not the date the work was performed.⁴

Filling Out the Form Step by Step

The 2026 IL-941 has seven steps.

Step 1: Your Information

Enter your FEIN, business name, and mailing address. If you file multiple IL-941 returns because you run separate payroll sequences, use the sequence number to distinguish them.

Step 2: About Your Business

Two annual counts and one closure box. Line A1 is the total number of W-2 forms reporting Illinois withholding you have issued for the year, and Line A2 is the total number of 1099 forms reporting Illinois withholding. Update these each quarter as your totals grow. If your business has permanently stopped withholding, check Box B and enter the date you stopped.⁶

Step 3: Amount Subject to Withholding

Line 1 is the total dollar amount of compensation subject to Illinois withholding during the quarter, including payroll, other compensation, and any additional amounts you withheld state income tax on.⁶

Step 4: Amount Withheld

This is the detailed section. You break the quarter down month by month. Lines 2a, 2c, and 2d each cover one month and ask for a day-by-day accounting plus a monthly total. Line 2b carries forward the first month’s total from Line 2a. Line 2 sums the three months, giving the total Illinois income tax withheld for the quarter.⁶

Step 5: Payments and Credits

Line 3 records credits from Schedule WC (most small employers leave this blank; see below). Line 4 is the total of the IL-501 deposits and electronic payments you made to IDOR during the quarter. Line 5 is Line 3 plus Line 4.⁶

Step 6: Your Balance

If Line 2 is greater than Line 5, subtract Line 5 from Line 2 and enter the balance due on Line 6, which you pay when you submit the return. If Line 5 equals or exceeds Line 2, you have no balance due, and you can apply the overpayment to the next quarter or request a refund.⁶

Step 7: Sign

An authorized officer or owner signs and dates the return. If a paid preparer completed it, that person’s PTIN, firm name, and signature go in the preparer section. You can authorize IDOR to discuss the return directly with the preparer by checking the box.

IL-501 Deposits During the Quarter

Most employers do not wait until the IL-941 deadline to send in all their withholding. IDOR assigns you a monthly or semi-weekly deposit schedule based on a look-back period ending June 30 of the immediately preceding calendar year.⁷

Monthly filers reported $12,000 or less in withholding during the look-back period, or are first-time filers. IL-501 payments are due by the 15th of the month after the month you withheld the tax.
Semi-weekly filers reported more than $12,000. Amounts withheld Wednesday through Friday are due the following Wednesday; amounts withheld Saturday through Tuesday are due the following Friday.

If you cross the $12,000 threshold during a quarter, you switch to semi-weekly deposits the following quarter and stay there for the rest of that year and the next.⁸ The IL-941 is still filed quarterly no matter your deposit frequency.

How to Submit

Illinois requires the IL-941 to be filed electronically.¹ Log in to MyTax Illinois, enter your quarterly data, and the system calculates your balance due or overpayment. If you owe, you can pay by electronic funds transfer during the same session. On a successful filing, MyTax Illinois issues a confirmation number, which is your proof of filing.⁹

If you genuinely cannot file electronically, request Form IL-900-EW (Waiver Request) by calling IDOR’s Taxpayer Assistance Division at 800-732-8866 or 217-782-3336. Wait for approval before mailing a paper return.¹ With an approved waiver, mail the completed IL-941 and any payment to:

Illinois Department of Revenue
PO Box 19052
Springfield, IL 62794-9052⁶

Make checks payable to the Illinois Department of Revenue and write your FEIN and the tax period on the memo line.

Schedule WC Credits

Line 3 references Schedule WC, which lets qualifying employers reduce their withholding tax liability with certain state-issued credits. Complete Schedule WC only if you earned or carried a credit during the reporting period.¹⁰ The most commonly relevant ones:

Minimum Wage Credit (Code 0900), available through December 31, 2027, for employers with 50 or fewer full-time equivalent employees. It offsets withholding payments for each qualifying employee.
Organ Donation Credit (Code 3000), for private employers offering all employees at least 30 days of paid leave for organ or bone marrow donation. The credit equals the withholding on wages paid during that leave, up to $1,000 per employee who takes it.
EDGE Credit (Code 5900), for businesses with an Economic Development for a Growing Economy agreement through DCEO.

Additional credits exist for REV Illinois, MICRO Illinois, Live Theater Production, and Local Journalism Sustainability, all requiring DCEO certification.¹⁰

Penalties and Personal Liability

Filing after the deadline triggers a penalty of 2% of the tax due, capped at $250. If you still have not filed within 30 days after IDOR mails a nonfiling notice, a second penalty is added: the greater of $250 or 2% of the tax shown on the return, capped at $5,000. For employers who file more frequently than annually, the first-tier penalty is abated if the late filing was not fraudulent and you had no late filings in the two preceding years.¹¹

Illinois treats withheld income tax as trust funds, meaning it belongs to the state from the moment you deduct it. Under 35 ILCS 5/1002(d), any person required to collect and pay over withheld tax who willfully fails to do so is liable for a penalty on top of the tax itself. The Uniform Penalty and Interest Act extends that further: any officer or employee with control over filing returns and making payments who willfully fails to do so is personally liable for the full amount of unpaid tax, interest, and penalties.¹² The state can pursue you individually if the business cannot pay. “Willfully” is the key word; paying other creditors while knowing withholding taxes remain outstanding is the classic example.

Records to Keep

Hold onto your payroll records, IL-501 deposit confirmations, and filed IL-941 returns for at least four years after filing the fourth-quarter return for the year, the IRS minimum for employment tax records.¹³ For each employee, your records should show total wages paid each pay period, all deductions from wages including tax withheld, hours worked, and the pay period covered by each payment.¹⁴ No specific format is required. Time clocks, spreadsheets, and payroll software all qualify as long as the records are complete enough to show how you calculated each quarter’s withholding if IDOR or the IRS asks.

Illinois does not require a separate annual reconciliation return. Your four quarterly IL-941 filings serve that function.⁷

1
Illinois Department of Revenue. 2026 IL-941 Illinois Withholding Income Tax Return
2
Illinois Department of Revenue. 2026 IL-700-T Illinois Withholding Tax Tables
3
Legal Information Institute. Ill. Admin. Code tit. 86, 100.7000 – Requirement of Withholding (IITA Section 701)
4
Illinois Department of Revenue. Instructions for Form IL-941 Illinois Withholding Income Tax Return
5
Illinois General Assembly. Illinois Compiled Statutes 35 ILCS 5/704A – Employer’s Return and Payment of Tax Withheld
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Illinois Department of Revenue. Form IL-941 Illinois Withholding Income Tax Return
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Illinois Department of Revenue. Pub-131, Withholding Income Tax Payment and Filing Requirements
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Illinois Department of Revenue. Publication 131 – Withholding Income Tax Payment and Filing Requirements
9
Illinois Department of Revenue. Electronically File Your Withholding Income Tax and Unemployment Insurance Tax
10
Illinois Department of Revenue. 2026 Schedule WC Instructions
11
Legal Information Institute. Ill. Admin. Code tit. 86, 700.300 – Penalty for Late Filing or Failure
12
Illinois General Assembly. Responsible Corporate Officer – Failure to File
13
Internal Revenue Service. Employment Tax Recordkeeping
14
U.S. Department of Labor. Fact Sheet 21 – Recordkeeping Requirements Under the Fair Labor Standards Act (FLSA)