Question

Cannot efile IL return due to >20% withholding

Forum|Forum|4 years ago
March 11, 2022
1 reply
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Tax status is married filing jointly. One spouse is a W-2 wage earner, other is self-employed. We have increased federal and state withholding for the W-2 earner in order to cover the additional taxes that the self-employed earner would normally have to file quarterly.

Now we are getting an error message when trying to efile our IL state return from desktop software. Message states, "NOTE - You cannot file your Illinois return electronically if you have a W-2 with Illinois withholding greater than 20% of Illinois wages. You can, however, e-file your Federal return in this situation."

According to the IL Department of Revenue website, this scenario should still be OK for electronic filing with third-party software. What are we missing?

TurboTax Home & Biz Windows

M

Mike9241

this is a guess. as a safeguard, Illinois computers may be programmed to reject returns where withholding is substantially in excess of the approx 5% tax rate. in essence, this is suspicious and the computer may have rejected it thing there's fraud. if it is the IDR computers, then all you can do is paper file. Illinois agents may not be aware of this safeguard or it might be a Turbotax safeguard to prevent "fraudulent" returns from being filed.

try again to e-file but in the end you may have to mail it. with such a large amount showing on the w-2 for withholding, this return may be audited