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Payroll & Benefits

Tax Withholding Allowance Certificates

University Payroll is responsible for ensuring that the University is in compliance with numerous Federal and State laws and regulations relating to the withholding of employment taxes on various types of remuneration, including payments made to nonresident aliens, student FICA exceptions, and fringe benefits, such as tuition waivers. Section 18 - Taxes for more information on policies relating to nonresident aliens, taxability of tuition waivers, student employee FICA exception and fringe benefits. See Also NESSIE.

Federal Form (W-4) and State (Form IL-W4) Withholding Certificates

To assure proper tax withholding all employees are required to complete an Employee's Withholding Allowance Certificate, Form W-4, for federal withholding, and Employee's Illinois Withholding Allowance Certificate, Form IL-W-4, for state withholding. Employees should complete Forms W-4 and IL-W-4 via the Compensation tab in NESSIE. The following information applies to both forms unless otherwise stated.

The amount of tax withheld is based on marital status and the number of allowances indicated on Forms W-4 and IL-W-4, unless the employee, having met the necessary conditions, claims exemption from withholding (applies to federal form only). No fixed amount or percentage withholding designated by the employee is permitted. A specific dollar amount to be withheld in addition to the required withholding is permissible. If Forms W-4 and IL-W-4 are not submitted, taxes will be withheld at the rate for the status of single with no allowances.

Forms W-4 and IL-W-4 are effective until a subsequent form is completed to replace the previous one, with the exception of federal forms claiming exemption from withholding, which must be renewed by February 15th of each year. The replacement Forms W-4 and IL-W-4 become effective no later than the payroll period ending on or after the 30th day from the date it is received. If an employee's tax status changes they are required to submit new Forms W-4 and IL-W-4 to reflect those changes, so that the proper amount is withheld. Changes can be made via NESSIE, or the forms may be downloaded, and the completed forms submitted to UPB.

The Internal Revenue Service has a Federal Tax Withholding Calculator that calculates the amount of tax required to be withheld as well as the number of allowances and marital status that should be claimed on the Form W-4 to have the withholding closely match the taxes due.

Reciprocal Withholding Agreement with Illinois (Form IL-W-5-NR)

Employees who are residents of Iowa, Kentucky, Michigan, or Wisconsin and receive compensation paid in Illinois may elect to claim exemption from withholding of Illinois Income Tax under the reciprocal withholding agreements between Illinois and these states.

To obtain this exemption individuals must complete an Employee's Statement of Non-residence in Illinois, Form IL-W-5-NR. Withholdings will be directed to the state indicated. In order to ensure proper withholding for that state, employees must complete the corresponding state withholding form. If the appropriate state form is not submitted, taxes will be withheld at the rate for the status of single with no allowances

Additional information regarding forms IL-W-4 and IL-W-5-NR may be found on the Withholding (Payroll) Tax Forms page.

Out of state Salary/Wage Payments

If a University employee receives compensation while living and working in another state, the compensation is considered paid outside of Illinois. If the University is registered as doing business in that state, the University is required to withhold according to that states withholding regulations.

The employee should complete the Certification of Non-residence in Illinois form and appropriate withholding form for their state and submit or fax to:
University Payroll and Benefits
University of Illinois
809 S. Marshfield Ave., M-C 547
Chicago, IL 60612-7205
Fax Number: (312) 996-6542

*Please note that the Certification of Non-residence in Illinois form is not required for those people working in a reciprocal state as identified on the IL-W-5-NR.

The University is currently registered in the following states (click on link for fillable/printable withholding form):

Last Updated: August 1, 2017

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