If I live and work in 2 different cities in Ohio, will city taxes for both be taken out of my paycheck?

[Nocturion]

Hi @Hal_Al, me and my wife are in a similar situation. Back in mid 2019 we bought a house in Plain City, OH. We both work in different cities, I work in Dublin and she works in Hilliard and both our employers withhold 2% in local income taxes (for Dublin and Hilliard respectively). On top of that we have 1.25% withheld from our paychecks for the local School District. A few weeks back we received a bill from the taxation department of the Village of Pain City for $4,500 for the portion of 2019 and the entire 2020. Their income tax rate is 1.5%.

Do we have to pay the whole thing? I know some municipalities have tax reciprocity between them. It would be nice if we can at least get a portion of the taxes withheld from the localities we work in.

[Hal_Al]

Q. Do we have to pay the whole thing?

A.  Yes.  Plain City is one of the few cities in Ohio that does not allow any credit for the tax that you paid to your work place city(s). 

School District Income Tax (SDIT) is a totally separate tax from City Income Tax (CIT), so the city will not give you a credit for the SDIT you paid, either. 

Ohio cities do not have "reciprocity", per se.  But, most allow a partial credit (some even a full credit), for tax paid to the work place location city.  You just happen to live in one that doesn't. 

[VR72]

I see in the best answer response this comment was made: "The city you live in will allow a credit or partial credit for the withheld tax you paid to the work location city. " I just want to note that everyone will need to check this. Marysville City's website specifically says "The City of Marysville does not give tax credits for taxes paid to another city." The best way to know for sure if your residential city offers any credits is to contact the city within which you live directly. I work in Hilliard and live in Marysville. My Hilliard taxes were withheld and my Marysville city taxes were not, as expected. I'm filing with Marysville for all of 2020 and Q1 of 2021, with no credits for the taxes I paid to Hilliard.

[brandi1263]

Just curious, what if your employer is only taking out exemptions for 1 and you actually have 3?  Wouldn't you have overpaid to the city you work in and need to file a return and get refunded the overpayment?

[Hal_Al]

Q. What if your employer is only taking out exemptions for 1 and you actually have 3?  Wouldn't you have overpaid to the city you work in and need to file a return and get refunded the overpayment?

A. No.  There are no "exemptions" for Ohio city income tax and withholding.  It's a straight percentage.  Everybody has the same % withheld, regardless of whether you have no kids or 10 kids. 

The "exemption certificates" you gave your employer was only for federal and state income tax. 

[brandi1263]

Thank you!  My check stub says 1 local exemption so I wasn't sure.  This makes sense.

[KrisD15]

Yes, that could be possible in which case you could file a city or county return to get that portion of tax refunded. 

If you are due a refund, you are not required to file. Only if you want the tax refunded would you perhaps want to file. 

TurboTax only supports certain city returns and those returns are only generated with the corresponding state return; therefore it may require you file the city return independently from your TurboTax program. 

[Terry p]

Just moved 18 months ago. 2022 we were in painesville township the whole year.. trying to do my wifes rita taxes. On her w2 it has cleveland 37k then under that it has painesville 20 k. The taxes they with held on both.. ive never seen it have two localities. This year is the first year she ever owed.. says she owes 500.. my.question is if she works in cleveland. Shouldnt it just have cleveland? Not both where she lives and works? Can this be a mistake hal?

[MarilynG1]

Apparently Ohio employers can withhold tax for the both the city worked in and the city resided in.  You can file your Cleveland and Painesville taxes separately, and you should get refunded from Painesville if you have to pay Cleveland.

You may want to leave the Local Tax info off your W-2 entry so you don't have issues Efiling.

Here's a link to Ohio Municipal Sites to help you. 

From @Hal_Al:

"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. He is not required to withhold for your residence city.
Employers are only required to withhold for the work city, although many will voluntarily withhold for the resident city as well. Employees of most big companies, in Ohio, seldom owe any city tax, at tax time (but they still have to file a resident  city return), because the employer holds out exactly the right amount for both work and resident city, taking into account the credit.
Yes, many people pay have to  both cities, although "double" is rare. But not all people have to pay twice, many cities allow their resident a full credit for what they paid the work city."

@Terry p 

 

[Terry p]

How to file differently? What are you saying to leave off of the w2

[Hal_Al]

@MarilynG1 said "Apparently Ohio employers can withhold tax for the both the city worked in and the city resided in.  You can file your Cleveland and Painesville taxes separately, and you should get refunded from Painesville if you have to pay Cleveland".

Although it works that way some times, I don't think it applies in your case.

Q. Shouldnt it just have cleveland? Not both where she lives and works? 

A. No.

It's not clear, but I assume you and your spouse live in Painesville and one of you works in Cleveland.  You employer was correct to withhold for both cities. You do not file a Cleveland return, unless there was a mistake in the amount of withholding (highly unusual).

You file a Painesville resident return thru RITA (you can file jointly or separate). 

If you are Painesville City Resident, they will give you a credit for what you paid to Cleveland (but not more than the Painesville 2.0% rate).  If, however, you are a Painesville Concord JEDD resident, there is no credit allowed (0% credit rate). You will owe the full amount

[UPSGuy4235]

So I live in Cuyahoga Falls OH, but work in Middleburg Heights OH. My employer with holds taxes for Middleburg Heights, but I also received a notification that I haven't filed my RITA taxes for the city I live in. So do I have to pay taxes to both cities?

[Hal_Al]

Q. So do I have to pay taxes to both cities?

A. Yes, for many people. But in your specific circumstances, no.  Cuyahoga Falls allows a 100% credit (up to 2%) and Middleburg Heights has the same 2% tax rate.

But, you do have to file a RITA return for Cuyahoga Falls, your residence city.

You are required to file a city return in the city you live in, if that city has an income tax.

You are not required to file in the city you work in, unless they failed to withhold the proper amount. If both cities have an income tax,  you may end up owing your resident city nothing, but you are still required to file a return. If you live and work in the same city and your employer did withhold the exact correct amount, you still have to file a return.

Incidentally, employers are only required to withhold for the work city, although many will voluntarily withhold for the resident city as well. Employees of most big companies, in Ohio, seldom owe any city tax, at tax time, because the employer holds out exactly the right amount for both work and resident city, taking into account the credit.