Can my city tax my pre-tax 401k contributions?

[helloworld]

I live in a small town near Dayton, OH. This is my first time filing taxes with 401k contributions.

I sent this email to individualtax@city.cleveland.oh.us

I have some 401k contributions. My wages box on w-2 is 50661 which subtracts my 401k contributions as it should. Even my state wages box is the same. But when I go to file my local return on this website, my taxable income is 51907.87 which adds my 401k contributions! Shouldn't my local tax be calculated on 50661?

Their response was:

Whatever box on the W-2 indicates the highest wage figure is what we are required to use.   So, if the high wage figure is $51, 907.87, then that is the figure you will need to use.  Get back to me with any additional questions or concerns.

[hbl3973 · Accepted solution]

The 2018 Cleveland income tax instructions http://ccatax.ci.cleveland.oh.us/taxforms/Y2019/muniit.pdf

states that "Retirement Plans, i.e. 401(k), 403(b), IRA, Keogh, STRS, PERS “picked up” by a public employer are not deductible from wages."

[helloworld]

Thanks! I also saw this statement in that document: "City taxes are paid on income (salaries, wages, profits, and other compensation) when it is earned, not when it is received in retirement."

Although, this raises a bigger question. Do all cities do this? (The rest doesn't apply if the answer is yes)
If I'm paying local taxes on my pre-tax contributions now; but in retirement, I move to a city in the USA that taxes my withdrawals. Will I get double taxed?

[hbl3973]

Unfortunately, could well happen.  See  <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/4646401-do-i-need-to-pay-ma-state-taxes-on-distributions-from-a-40...> for similar situation with state taxes.

[CuriousMindsWantToKnow]

I also noticed this when doing my taxes last year.  So if the City is taxing on earned income and not "received" income, doesn't that mean that when I then start taking retirement that my contributions are being taxed twice?  I was under the impression that they couldn't tax the same dollar more than once.  Any perspective would be appreciated.

[ThomasM125]

Per the following from the City of Dayton website, they tax wages, rental income and other earned compensation. There is no mention of retirement benefits. So it seems they tax your gross wages because they will not tax your pension distributions later on. The federal government and apparently your state does not tax the money you put away for your pension until you take distributions from it. Either way it is getting taxed, it is just that the City taxes it up front rather than when you retire.

City of Dayton website