In an article by Daniel Tay and published by Law360, David A. Hughes discusses how Illinois nonresident employees have received a 30-day safe harbor against state income tax to carry out a 2019 law intended to prevent double taxation.
Illinois' 30-day threshold is longer than the periods seen in other states David told Law360. He also noted that the Illinois rule is unique in that it was adopted legislatively, while many other states with safe harbors have implemented them through informal announcements by their departments of revenue.
Under the new rule, employers will be required to maintain records that account for where their employees' services are performed to appropriately allocate their wages to state income tax. The regulation includes examples of how to determine whether an employee's work performed outside the state is incidental and should therefore be counted toward the 30-day Illinois threshold.