Working from home became quite common over the past two years during the COVID-19 pandemic. There are some tax implications for businesses, workers and cities.
Here are five things to know about taxes and work from home rules in Ohio.
1. Since 2020 businesses have been permitted to withhold municipal income taxes where the company is located, even if workers are working from home or other remote locations.
2. For the 2021 tax year, workers who worked from home all or part of their work week can claim a municipal income tax refund if their employer withheld taxes where the company was located rather than the employee’s actual work location.
3. Requesting a refund is voluntary, but workers who receive one are obligated to pay any municipal taxes owed to their home city. And yes, the cities are communicating with each other about who got a refund so if you get one, your home city will know.
4. Look at city websites for tax refund applications and apply early. Unless you get an extension from your home city, you may have to pay taxes there before your refund from the workplace city arrives.
5. In 2022 the withholding rules return to their pre-pandemic state, meaning employers are obligated to withhold municipal income taxes where employees actually work.
Sources: Cites of Kettering and Dayton, Regional Income Tax Agency and Ohio Municipal League
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