Live-in & Work-in City Examples FAQ's

  1. My residence city mailing address is Columbus, yet I actually reside within the Worthington city limits and work in an unincorporated area or township that has no local tax.  Do I have a local tax obligation and, if so, to which city(ies)?

When working in an unincorporated area or township that has no local tax, your entire local tax obligation is to your city of residence, in this case, Worthington. See W-2 Example 6.

  1. I work in a city that has a 1% local tax rate and I reside in a city that has a 2% local tax rate, yet my employer only withheld 1% local tax to my city of employment.  How can I meet my total 2% local tax obligation to my city of residence? 

You may request that your employer, as a courtesy, withhold the additional tax due (in this case, an additional 1%) for your city of residence.  However, your employer is not required to withhold the additional tax due for your city of residence.  They are only required to withhold tax for your city of employment.  Please advise your employer to contact RITA for residence tax withholding information.

In the event your employer chooses not to withhold the additional tax due to your city of residence, you should establish an account with RITA and make quarterly estimated tax payments to satisfy your residence city tax obligation. 

  1. I work in a city that has a 2% local tax rate and I reside in a city that has a 2% local tax rate, yet has a reduced tax credit (see example below).  How do I meet my total 2% local tax obligation to my city of residence? 

You may request that your employer, as a courtesy, withhold the additional tax due for your city of residence.  However, your employer is not required to withhold the additional tax due for your city of residence.  They are only required to withhold tax for your city of employment.  Please advise your employer to contact RITA for residence tax withholding information.

In the event your employer chooses not to withhold the additional tax due to your city of residence, you should establish an account with RITA and make quarterly estimated tax payments to satisfy your residence city tax obligation.

Example: a Bexley resident who earned $10,000 in W-2 wages while working in Columbus and who had $200 in local tax withheld to Columbus (Columbus tax rate is 2%), would owe an additional $40 to Bexley due to the tax credit for Bexley residents being .80 or 80%. Here’s why:

                                                                         TAX RATE                TAX CREDIT                CREDIT LIMIT
            Residence City: Bexley                                .02                             .80                                 .02 

$10,000 (W-2 wages earned in Columbus) x 2% (Columbus tax rate) = $200 (Columbus tax withheld).  The Bexley credit limit is .02 (which in this case, is the same as the Columbus tax rate).  Therefore, the credit limit amount is $200

$200 credit limit x .80 (Bexley tax credit rate) = $160 (amount of Bexley tax credit).

Total local taxable obligation for residents of Bexley is 2% x $10,000 (W-2 local taxable wages) = $200 Bexley tax obligation - $160 Bexley tax credit = $40 additional Bexley tax due.

See W-2 Example 2D.

  1. I work in a city that has a 2.0% local tax rate and I reside in a city that has a higher local tax rate.  How do I meet my total local tax obligation to my city of residence? 

You may request that your employer, as a courtesy, withhold the additional tax due to your city of residence.  However, your employer is not required to withhold local tax for your city of residence, only for your city of employment. Please advise your employer to contact RITA for residence  tax withholding information.

Example: a Youngstown resident who earned $10,000 in W-2 wages while working in Warren and who had $200 in local tax withheld to Warren would owe an additional $75 in local tax to Youngstown due to the individual’s total local taxable obligation to Youngstown equaling 2.75%. Here’s why:

                                                                         TAX RATE              TAX CREDIT               CREDIT LIMIT
           Residence City: Youngstown                       .0275                         1.00                              .0275           

$10,000 (W-2 wages earned in Warren) x 2% (Warren tax rate) = $200 (Warren tax withheld).  The Youngstown credit limit is .0275 (which in this case is greater than the .02 Warren tax rate); however, the credit limit may not exceed the applicable city rate to which the tax is due primarily, or the work city.  Therefore, the credit limit amount is $200 (the tax withheld for Warren).

$200 credit limit x 1.00 (Youngstown tax credit rate) = $200 (amount of Youngstown tax credit).

The total local taxable obligation for Youngstown residents is 2.75% x $10,000 (W-2 local taxable wages) = $275 Youngstown tax obligation - $200 (Youngstown tax credit amount for tax withheld to Warren) = $75 additional Youngstown tax due.

See W-2 Example 2B.

  1. I reside in Reynoldsburg (1.5% tax rate) and I work in Columbus (2.0% tax rate) and my W-2 employer withheld $200 in local tax to Columbus on my W-2 wages of $10,000.  Am I eligible for a refund?

No.  Local tax is due to the city in which the wages are earned (city of employment) based on the rate of tax in that city.  No local tax is refundable to you because your total local tax obligation as a Reynoldsburg resident (1.5%) is less than your city of employment (Columbus) tax rate (2.0%).  In this case, Columbus receives $200 in local tax and Reynoldsburg receives $0.

See W-2 Example 1A.

  1. I work out of my home for an employer.  Is my home work location considered an employment location and is my employer required to withhold local taxes on my wages?

Yes.  Your residence location is your employment location and your employer is required to withhold local tax to your city of employment.  However, if your employer is an out of state company that does not maintain a local office, they may not withhold the tax for you.  In this case, you would need to file a declaration of estimated tax and make quarterly payments on your own behalf.

  1. My employer over withheld local tax to one of my employment cities, yet I owe additional tax to my RITA city of residence. Can I apply that over withheld amount to the amount due to my residence city?

No.  However if your tax has been over withheld by your employer at a rate greater than the work city rate, you may be entitled to a refund from your workplace city.  Contact the tax department of your work city for more information.

  1. Does RITA recognize local tax withheld or paid to cities outside of the State of Ohio? 

Yes, if the local tax was withheld or paid correctly to a city or township.

  1. I worked in the state of Kentucky (or out-of-state) and I live in a RITA city.  My W-2 shows local wages and local tax withheld to a county in Kentucky.  Is a county tax a local tax?

No.  County tax is not a local tax and it should not be reported on a RITA return. 

  1. Are municipal tax revenues shared between municipalities? 

No.  Each employer is required to withhold municipal income tax from its employees.  Tax revenues are paid to the city in which the work is performed.  The tax revenues are not shared with any other community.  You may owe additional tax to where you live depending on your residence municipality’s tax rate, tax credit, and credit limit.