Discussion:OH - Avon Lake Locality
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Discussion Forum Index --> Basic Tax Questions --> OH - Avon Lake Locality
Discussion Forum Index --> Tax Questions --> OH - Avon Lake Locality
| 21 February 2008 | |
| I don't usually do out of state returns, but this is a long-term client that moved, and I will usually do the return that is partial for both states before they move on to another preparer. This isn't typically a problem, but this is the second time I've run into locality taxes. Is anyone familiar with Avon Lake, Ohio that is willing to tell me if I have to file a local return. Their web site isn't exactly informative. | |
| 21 February 2008 | |
| Wwtaxes:
Go to the state of Ohio website: http://tax.ohio.gov/online_services/thefinder.stm After entering the clients address, the website will display the taxing districts. Adunncpa | |
| 21 February 2008 | |
| You may also want to contact the Regional Income Tax Agency for specific information about your client.
Questions regarding filing or payment of your municipal income tax should be directed to either: Regional Income Tax Agency: Contact R.I.T.A. Avon Lake Tax Department: Tel: 440.933.6141 800.365.8626 Fax: 440.930.4107 | |
| 21 February 2008 | |
| Also, the RITA website lets you drill down for the forms, rates, and regs for each locality - e.g., Avon Lake is here: | |
| 15 March 2008 | |
| Calling all OH experts again!
Client has one W2, with $121K in box1, divided up as 6K to MN and 115K to OH, but has 120K to Avon Lake locality. She worked in OH all year, but sold MN residence and bought OH residence in January. After reading through the first pound of instructions, I've come to the conclusion that I would move rather than prepare OH taxes. I can't figure out if this allocation is correct due to the fact that she worked there all year, or if this is incorrect and I should adjust form 37 for it. She also had a $650 2006 MN refund, which I listed as non-OH income. ProSeries seems like it fills out form 37, but it is using the amount on the W2, and I'm thinking this is incorrect. Any suggestions? | |
| 15 March 2008 | |
| There's no reciprocal agreement between Ohio and Minnesota. If she worked in Ohio all year, all of her earnings are taxable in Ohio. Minnesota would tax only her Ohio earnings during the part of the year she was a MN resident, and will allow her credit for the tax she pays to Ohio on that income.
State income tax refunds are not taxable in either MN or OH. Neither state allows a deduction for nonbusiness income taxes. | |
| 15 March 2008 | |
| Katie, at first I couldn't understand your reply, but then I realized my post was wrong! I don't think she worked in OH all year. Actually, I think most of January was on house-hunting trips, selling a house, and buying a house. I'm not sure she 'worked' much in January at all. But her W2 shows MN income. She was working for Ford in MN, moved in mid-January to work for Ford in OH. I'm assuming from Ford's W2 that they didn't transfer her record to her new dept until mid-January, and hence the W2 entries. I suppose I could file her as a full year resident of OH, but I read her W2 as saying she was a part-year resident in each state. If that's the case, then I don't understand why all of her income would count for the Avon Lake locality. It seems to me that her Avon Lake income should be the same as her OH income. Sorry about the incorrect post. Given these circumstances, my guess is that ProSeries is just taking the number off the W2 instead of taking the income distribution into account. It calculates the OH income ok, but not the locality income. | |
| 15 March 2008 | |
| I'd agree that she was a part-year resident of each state. Whether or not she actually worked in MN during the first half of January, she was a resident until mid-January and her income during that time is taxable in MN. The W-2 allocation between the states sounds right. You probably have to make some override in Proseries (with which I am not familiar) to get the Avon Lake amount right. | |
| 16 March 2008 | |
| Hi, Joyce - it's been a long time since I've had to deal with RITA/Ohio municipal taxes, so while I knew right away where to send you to find out about the forms, etc., I don't know specific answers to the issues you're having. For what it's worth, though - you're not alone in your dislike of this tax! And, as far as the 120k Avon Lake wages vs 115k Ohio wages, I can think of a couple possible explanations that would support the W-2 being correct, and therefore that you're getting the correct result from Proseries.
First, the difference could be 401k, deferred comp, or something similar - I know the municipal tax includes that as taxable income, and perhaps it's excluded from wages for the state of ohio. Second, my recollection is that the municipal tax is collected on income earned during the time you were living in the municipality, no matter where the work was performed. So if her home purchase, or establishment of residency in any way, occurred earlier than the date of the payroll change, then perhaps the W-2 is reflecting the right of Avon Lake to tax income that MN also has the right to tax, e.g., if MN considers her still to be working in MN through Jan 18, and Ohio acknowledges that she started working in Ohio on Jan 19, but Avon Lake considers her to be a resident from Jan 4 onward and taxes her accordingly. Or it could be some combination of those two explanations. Sorry I can't help more specifically, but I hope these leads help you narrow down the problem and find a solution. | |
| 16 March 2008 | |
| Trillium has a good memory. I'll make one clarification: The city withholding tax on the W-2 is for the city in which she works, in this case Avon Lake. You have to file a tax return for the city in which your client lives, which may be different than Avon Lake. Ohio also has townships which do not assess city income tax so residents of townships don't need to file city income tax returns. (Cross your fingers that she lives in a township and you don't need to do anything!) What city does your client live in? | |
| 16 March 2008 | |
| Client lives in Avon Lake. Thanks much for all the replies. I will try to clarify with her when she established residence in OH. I really think that ProSeries is just taking the number off the W2, and not taking the part-year distribution worksheet into account. That's why I was asking around to see if anyone else uses ProSeries to do OH taxes. But then they would also have to be doing part-year resident taxes, so I guess it was a long shot! Since we're only talking about 2 weeks, and $23 more due to Avon Lake, it's probably not worth fighting with.
Thanks again! | |
