Do I have to pay income tax to Lancaster AND Colum...
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hboyer98
Returning Member

Do I have to pay income tax to Lancaster AND Columbus?

Hello, I'm an Ohioan and I had a question on whether they have to take both city income taxes out of my check to avoid owing? Is there a credit of some sort when you work in one city and live in another?

The Columbus tax rate is 2.5% and Lancaster is 1.75%.

I live in Lancaster and work in Columbus, on my husbands earnings statement they take where we live AND where we work. I don't wanna owe the Government.

2 Replies
Hal_Al
Level 15

Do I have to pay income tax to Lancaster AND Columbus?

Q. Do I have to pay income tax to Lancaster AND Columbus?

A. Yes.  See next question, for explanation. 

 

Q. Is there a credit of some sort when you work in one city and live in another?

A. Yes. But while many cities allow a full credit, Lancaster does not. Lancaster allows only 1%, maximum.. So, you will pay 0.75% to Lancaster at tax filing time.  But you say your Husband's employer withholds for both.  USUALLY, when that happens, the employer has already adjusted for the credit.  You may owe nothing, but you still have to file a Lancaster return.

 

Q.  Do they "have to" take both city income taxes out of my check to avoid owing?

A.  No, they are only required to withhold for the work city.  But, many employers will voluntarily do both and adjust for the credit so that yo do not owe at tax time. 

 

Although TurboTax can do some Ohio city returns, Lancaster is not one of them.

 

City income tax web site https://www.ci.lancaster.oh.us/191/Income-Tax

 

 

Hal_Al
Level 15

Do I have to pay income tax to Lancaster AND Columbus?

OHIO CITY INCOME TAX (General Info)

Some Ohio Cities have an income tax. Any Ohio city, with an income tax, is allowed to have withholding taken out of your pay while you worked in that city. Your employer is required to do that withholding. You can't get a refund unless it was improperly withheld, i.e. you didn't actually work there for all or part of the time that your employer was withholding.  If you live in a city with an income tax, you are subject to that city's tax as well. The city you live in will usually allow a credit or partial credit for the withheld tax you paid to the work location city.

 

235 cities and 331 villages in Ohio have an income tax, including Columbus, Toledo, Cincinnati, and Cleveland.  Ohio law requires a flat rate that cannot exceed 1%, unless it is approved by the voters.  Ohio local income tax rates range from 0.40% in Indian Hill to 3% in Parma Heights.

 

There are 2 state wide agencies that help Ohio Cities collect City Income taxes. One is CCA (Central Collection Agency) and the other, larger one, is RITA (Regional Income Tax Agency). There is a pull down list of cities, in Turbo Tax(TT), for both City Tax Forms (CCA) & RITA. TurboTax can only do RITA & CCA cities.  But many  Ohio cities use neither agency. These cities design their own forms and require you to use them.  You can get paper copies from the individual city. Most are available at the city’s web site. Many cities will prepare the tax return for you, but you have to go to city hall in person. Some may have on line filing (try the city web site). Although they won't usually admit it, some will even accept CCA forms. So you could try filling out a CCA form on TurboTax and mailing it to your city. But, I actually find it easier to fill out a city return by hand or at the city, CCA or RITA web site, than to use TT. Things don't happen automatically and you need to know what you’re doing. The actual  city forms are (usually) easier to follow than the TT interview.

 

TT cannot e-file an Ohio City, CCA or RITA return. It must be printed and mailed.

 

TurboTax (TT) does not automatically prepare a city return, you must initiate it. At the screen, in the Ohio program, titled 
 "A few things before we wrap up your state taxes"
      scroll down to Ohio City taxes. 
Or, later
"Your 2019 Ohio Taxes are ready for us to check"
    -Click Other situations
    -Scroll down to Ohio City taxes. 

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