Learn about withholding allowances, additional allowances and stay to update. Use the following pages to complete your Illinois State and Federal income tax withholding, or W-4 information.Complete the worksheet on the back of this page to figure the correct number of allowances you are entitled to claim. Give your completed Form IL-W-4 to your. Claiming 'Exempt' From Federal Tax Withholding. Illinois Form IL-W4, must be completed to know how much state income tax to withhold from your new employee's wages. You may complete a new Form IL-W-4 to update your exemption amounts and increase your Illinois withholding. How do I figure the correct number of allowances? Exemption from withholding is filled out if you do not want any tax withheld. You must also enter the tax year you wish to be exempt.