The new IL withholding requirement applies to tax years ending on or after Dec. 31, 2008. It applies to S corporations, partnerships and trusts.
Pass-through entities (PTEs) must file Form IL-1000, Pass-through Entity Payment Income Tax Return and make a PTE payment on behalf of nonresident owners.
The due date is the PTE’s original due date (i.e., 3/15 for S corporations, 4/15 for partnerships and trusts). Estimates are not required.
PTE’s are required to make payments for all nonresident owners except:
1) individuals who are included in a IL Composite return; or
2) non-individual owners (corporations and other PTEs) who document to the pass-through entity on Form IL-1000-E, Certificate of Exemption for PTE Payments, that they will file a return and pay the IL income tax. (The PTE should keep copies of Form IL-1000-E in its files.)
Planning Note: Non-individual owners in tiered entity situations could provide Form IL-1000-E to lower tier entities to keep them from making nonresident withholding payments. This would hopefully minimize over-withholding situations from occurring.
If you have any questions, please contact me at leveragesalt@earthlink.net.
Illinois Department of Revenue, IL - Informational Bulletin FY 2009-02, October 2008
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