You must file Form IL-W-4 when Illinois. Income Tax is required to be withheld from compensation that you receive as an em- ployee.Illinois Form IL-W4, must be completed to know how much state income tax to withhold from your new employee's wages. (Your withholding will be most accurate if you complete Steps 3–4(b) on the Form W-4 for the highest paying job.) Step 3: Claim. Dependent and Other. Credits. The IL-W-4 form needs to be filled out on or before the first day of work. Complete form IL-W-5-NR, Employee's Statement of Nonresidence in Illinois to claim the exemption. The W-4 form is used to record the correct amount of federal and state income tax that needs to be withheld from your pay. You should complete this form and give it to your employer on or before the date you start working for your employer. You may file a new Form IL-W-4 any time.