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Paid Today? You'll Feel Pinched



    Paid Today? You'll Feel Pinched
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    Businessman showing out empty pockets

    Get paid today?

    You may notice a little something missing from your paycheck as the new Illinois tax hike takes effect retroactive to January 1.

    According to a bulletin on the Illinois Department of Revenue web site residents should be prepared to see their paychecks zapped of an extra 2 percent of Illinois revenue.

    The Illinois Income Tax rate for individuals has increased from 3 percent to 5 percent, effective January 1, 2011.

    The new rate of withholding applies to
    • employee compensation (i.e., wages and salaries) paid in Illinois,
    • unemployment paid to an Illinois resident who has asked to have
    Illinois taxes withheld, and
    • gambling or lottery winnings in Illinois paid to an Illinois resident.
    Booklet IL-700-T, Illinois Withholding Tax Tables, has been updated and
    is available on our web site. 

    If you use an automated payroll method to figure your withholding, use
    the following formula:
    .05 x (Wages — ((IL-W-4, Line 1 allowances x $2,000) + (IL-W-4, Line 2 allowances x $1,000)))

    The Illinois Policy Institute has a handy Quinn Tax Hike Calculator if that formula is too confusing.

    The highly unpopular tax hike has raised ire among a number of individuals.

    At least one group has started a petition to recall Governor Pat Quinn because he agreed to sign it.

    Meanwhile, former governor Rod Blagojevich ripped the tax increase as a bad idea. He issued scathing comments to the Chicago Sun-Times.

    “I hate the fact I was right about this,” Blagojevich told the Chicago Sun-Times Thursday in his first public comments on this week’s votes in the General Assembly to raise the state income tax and do away with free rides for all seniors.

    “It’s a mindset that Quinn, the insiders in Springfield and these lawmakers have. And it’s this: The question for them isn’t what we can do for the people, but what can the people do for us,” Blagojevich said.

    “The way they did it is very cynical by having the lame-duck Legislature, where some members actually got beat, raise taxes 66 percent and take public transportation away from your grandmother. This illustrates exactly what I fought for six years. ... If they thought this was the right thing to do, why didn’t they do this before the election?” Blagojevich said.