What tax forms are required for new hires?

Tax Forms Required for New Hires in Illinois

When hiring employees in Illinois, it is essential to collect and manage specific tax forms to ensure compliance with federal and state requirements. Proper handling of these forms supports accurate payroll processing, tax withholding, and reporting.

Federal Tax Forms

• Form W-4 (Employee's Withholding Certificate): New employees must complete this form to determine federal income tax withholding. Employers use the information to calculate the correct amount of tax to withhold from wages.
• Form I-9 (Employment Eligibility Verification): This form verifies the employee's identity and authorization to work in the United States. Employers must retain this form for compliance but do not submit it to tax authorities.

Illinois State Tax Forms

• IL-W-4 (Illinois Employee's Withholding Allowance Certificate): Illinois requires employees to complete this form to establish state income tax withholding. Employers use it alongside the federal W-4 to calculate state tax deductions.
• New Hire Reporting: Employers must report all new hires to the Illinois Department of Employment Security (IDES) within 20 days of the hire date. This is done electronically or by mail using the New Hire Reporting Form. This supports child support enforcement and unemployment insurance programs.

Operational Tips for Managing Tax Forms

• Collect Forms Before Payroll: Ensure all required forms (W-4, IL-W-4, I-9) are completed before the first paycheck to avoid payroll errors.
• Maintain Accurate Records: Keep completed forms securely for the duration of employment plus the required retention period to comply with audit and reporting rules.
• Automate Form Collection: Use digital onboarding platforms to streamline form collection, reduce errors, and maintain compliance efficiently.
• Stay Updated: As of 2026, review federal and Illinois tax form requirements annually to incorporate any changes into your hiring process.