Pursuant to the passage of Amended Substitute House Bill 5 in December 2014, new municipal income tax guidelines mandated by the State of Ohio have been established effective with Tax Years beginning January 1, 2016 and after.
Tax returns and payments for Tax Years beginning prior to January 1, 2016, regardless of the actual filing or payment date, are unaffected by the provisions of Ohio House Bill 5.
Details of the new Ohio municipal income tax guidelines can be found in Chapter 718 of the Ohio Revised Code (ORC) located at: http://codes.ohio.gov/orc/718 .
Numerous changes are mandated by HB 5, including, but not limited to, the following:
- Changes to filing due date for employer withholding:
Monthly withholding remittance and payment must be made no later than 15th day of the month following the reporting period. Quarterly remittance and payment must be made no later than the last day of the month following the reporting period. See ORC Section 718.03.
- Changes to monthly and quarterly withholding thresholds:
- Employers must remit monthly if withholding in the previous calendar year exceeded $2,399 OR if the amount of withholding during any month of the previous calendar quarter exceeded $200. See ORC Section 718.03.
- Withholding guidelines for employers with transient workers; and for those employers qualified as a “small employer”: See ORC section 718.011.
- Changes to estimated tax payment requirements and due dates:
Estimated payments are required for businesses and individuals expecting to owe $200 or more in non-withheld tax. Estimated tax payment due dates: 15th day of 4th month, 15th day of the 6th month, 15th day of the 9th month, and 15th day of the 12th month (April 15, June 15, September 15, and December 15 for calendar non-individual filers, and April 15, June 15, September 15, and January 15 for individual filers). See ORC section 718.08.
- Changes to penalties and interest:
- Late Payment Pentalty on unpaid income tax and unpaid estimated income tax: 15% of the amount not timely paid
- Late Payment Penalty on unpaid withholding tax: not to exceed 50% of the amount not timely paid
- Late Filing Penalty for failure to file timely annual income tax and withholding tax return: $25 per month or fraction thereof, regardless of tax liability, up to $150 per return.
- Interest will be imposed per annum on all unpaid income tax, unpaid estimated income tax, and unpaid withholding tax. See ORC section 718.27.
- If the amount shown to be due on the annual income tax return is $10.00 or less, the taxpayer is not required to pay the tax, but is still required to file the tax return. Applies to individuals and net profit filers. See ORC 718.05
The interest rate applicable to calendar year 2016 is 5.00% per annum.
The interest rate applicable to calendar year 2017 is 6.00% per annum.
The interest rate applicable to calendar year 2018 will be 6.00% per annum.
TAXPAYERS’ RIGHTS AND RESPONSIBILITIES
"Taxpayers' rights and responsibilities" means the rights provided to taxpayers in Sections 718.11, 718.12, 718.19, 718.23, 718.36, 718.37, 718.38, 5717.011, and 5717.03 of the Ohio Revised Code and any corresponding ordinances of the Municipality, and the responsibilities of taxpayers to file, report, withhold, remit, and pay municipal income tax and otherwise comply with Chapter 718 of the Ohio Revised Code and resolutions, ordinances, and rules adopted by a municipal corporation for the imposition and administration of a municipal income tax.