An employee is either
- a person who performs services subject to the legal control and direction of an employer or
- an Illinois resident who receives payments on which federal income tax is withheld by the employer.
A payee is a person who receives non-wage income, gambling, sports wagering, or lottery winnings, or a lump sum payment for rights to lottery winnings.
Note: An individual who has a proprietary interest in a business that he or she can legally sell, give away, or operate without hindrance of any other party is self-employed. These individuals are not subject to withholding tax requirements.
Publication 130, Who Is Required to Withhold Illinois Income Tax or
IRS Publication 15 Circular E, Employer’s Tax Guide, for more information.