Philip1117 Posted April 8, 2014 Report Share Posted April 8, 2014 ATX User I have one Ohio client. Got him from a business I purchased. I'm in Central PA. They live in Hunting Valley Ohio 44022. The w2 has no local wages or tax. At the bottom of the w2 screen is information for the school district. The question is do I need to do anything with the school district? If so which one and how much tax. Is there local tax? Help is appreciated Phil Quote Link to comment Share on other sites More sharing options...
Margaret CPA in OH Posted April 8, 2014 Report Share Posted April 8, 2014 You need to know the county. All school districts do not have tax, either. Check here page 43 http://www.tax.ohio.gov/portals/0/forms/ohio_individual/individual/2013/PIT_IT1040_Booklet.pdf Check with the client to see which county and whether they live in a taxing school district. Many employers do not withhold for school district anyway so if there is nothing on the W-2 there is no entry on the input. That does not mean the client is not liable for school district tax. Quote Link to comment Share on other sites More sharing options...
JJStephens Posted April 9, 2014 Report Share Posted April 9, 2014 If the taxpayer resides in a taxing school district, a SD return probably must be filed. In most cases, the SD return begins with Ohio AGI (which, in turn, is based in part on federal AGI). Therefore, the fact that the W2 showed no income may not be the determining factor in whether to file a SD return. A couple Ohio tax issues are kind funky. School district tax is one of them. I know this is TMI . . . but here it is anyway. School district tax is based on the school district in which the taxpayer resides. Not all school districts have a tax (I don't know the exact ratio but my guess is it's about 50-50). Further, income for most school district income taxes is based on Ohio AGI (comes from the Ohio income tax return) but a handful are earned income only (i.e., only wages, self-employment, farm income are taxed). Another wrinkle is that the only withholding that can be applied is that which was withheld for the correct district. Withholding for another district cannot be applied. If tax is withheld for the wrong district, the taxpayer has to go back to their employer to get the incorrect withholding amount refunded. City tax withholding is based on the municipality in which the taxpayer works. The workplace city is permitted to keep the entire amount withheld/remitted by the employer. If the taxpayer's residence city has a city income tax, the taxpayer must complete a city tax return (a few cities waive the filing requirement if the taxpayer's only taxable income already had city tax withheld for the residence city). Each city is allowed to choose to give full, partial or even no (!) credit for workplace city tax withheld. In any event, no city allows a credit greater than its own tax rate (i.e., a taxpayer who works in a 2% taxing city will not get a refund if (s)he lives in a 1% city). It really sucks when a person works in a city with a 2 or 2.5% city tax and their residence city gives no credit--especially if the residence city rate is high. Taxable income includes wages, self-employment, farm, and rental. Self-employment, farm and rental losses cannot reduce wage income. Most cities allow for a 2106 deduction if a 2106 is required to filed with the federal return (if the 2106 is optional, the 2106 credit is disallowed). Quote Link to comment Share on other sites More sharing options...
Philip1117 Posted April 9, 2014 Author Report Share Posted April 9, 2014 I thought PA was bad! Phil Quote Link to comment Share on other sites More sharing options...
Margaret CPA in OH Posted April 9, 2014 Report Share Posted April 9, 2014 JJStephens gave you the whole scoop. I didn't want to scare you will all that detail until/unless you found out whether your client was even in a taxing school district. It is TMI, as he says, but does serve to provoke additional sympathy for those of us in Ohio. All states have issues: CA and NY come to mind. But we got some issues here, too!Let us know whether you have to deal with this. As you can see, help is available! Quote Link to comment Share on other sites More sharing options...
JJStephens Posted April 9, 2014 Report Share Posted April 9, 2014 TMI? I was just trying to put on a false front of modesty. I thought it was a masterpiece of prose! Yeah, I know. TMI 3 Quote Link to comment Share on other sites More sharing options...
joanmcq Posted April 10, 2014 Report Share Posted April 10, 2014 Nah, JJ that was a great primer into the mess that is Ohio local tax that we out of state preparers may face from time to time. I just got as a client a retired guy that moved here from OH. Had to research a local tax waiver, that stated his income was from exempt sources. I instructed his daughter to also make sure she filled in the change of residence info, so they'd know he left! I've gotten a few new clients that moved from OH & PA this year. Quote Link to comment Share on other sites More sharing options...
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