As droves of Ohioans suddenly worked from home in 2020, the state legislature passed an emergency measure that allowed cities to continue collecting income taxes based on where employees would have paid income taxes if there was no pandemic and they were in the office.
But that emergency measure has ended. And the state legislature recently wrote into the two-year budget that Ohioans in 2021 onward will pay municipal income taxes where they work, including if that’s at the kitchen table. This means Ohioans can apply for refunds on 2021 taxes withheld improperly.
You qualify for a refund if you meet all the following criteria:
- You worked from home in 2021 for more than 20 days (they need not be consecutive). A day is counted based on where you spent the majority of your working hours that day.
- Your home is not located in the same municipality as your work.
- Your employer withheld municipal income taxes from your paycheck for a municipality based on your employer’s location.
You will only get money back in your pocket if the municipality you reside in has no income tax, or a lower income tax rate than the city where your employer is located, or your hometown does not give you full credit for taxes paid to another municipality.
Here are three examples of how it could work for taxpayers who seek refunds:
- Some could get full refunds: If your employer is in Dayton and withholding the city’s 2.5% income tax from your paycheck but you work from home this year in a community like Beavercreek, where there is no income tax, you could get a refund.
- Some could get partial refunds: For residents of a city like Clayton, where the income tax rate is 1.5% and residents working outside the city receive only a 50% credit for taxes paid to another city, work-from home employees could get a partial refund.
- Some would change where they pay their taxes, but see no refund: If your employer in Centerville is withholding the city’s 2.25% income tax but you work from home in Kettering, where the income tax is also 2.25%, taxes would be shifted from one city to the other.
Here is a list of cities and villages in Butler, Clark, Greene, Miami, Montgomery and Warren Counties that collect income taxes and the credits those municipalities grant to residents who pay based on employment elsewhere. Ohio Townships cannot collect income taxes. A few cities and some villages do not collect income taxes.
| City or Village | Income Tax Rate | Tax Credit |
|---|---|---|
| Bradford | 1.00% | 0.00% |
| Brookville | 2.00% | 2.00% |
| Carlisle | 1.50% | 1.00% |
| Catawba | 1.00% | 0.00% |
| Cedarville | 1.25% | 1.25% |
| Centerville | 2.25% | 2.25% |
| Clayton | 1.50% | 0.75% |
| Corwin | 0.50% | 0.50% |
| Covington | 1.50% | 0.75% |
| Dayton | 2.50% | 2.50% |
| Englewood | 1.75% | 1.75% |
| Fairborn | 2.00% | 2.00% |
| Farmersville | 1.00% | 0.50% |
| Franklin | 2.00% | 2.00% |
| Germantown | 1.50% | 0.90% |
| Hamilton | 2.00% | 2.00% |
| Huber Heights | 2.25% | 2.25% |
| Jamestown | 0.50% | 0.50% |
| Kettering | 2.25% | 2.25% |
| Lebanon | 1.00% | 1.00% |
| Loveland | 1.00% | 1.00% |
| Maineville | 1.00% | 1.00% |
| Mason | 1.12% | 1.12% |
| Miamisburg | 2.25% | 2.25% |
| Middletown | 2.00% | 2.00% |
| Monroe | 2.00% | 2.00% |
| Moraine | 2.50% | 2.50% |
| Morrow | 1.00% | 0.50% |
| New Carlisle | 1.50% | 0.00% |
| New Lebanon | 1.00% | 0.00% |
| New Miami | 1.75% | 1.75% |
| Oakwood | 2.50% | 2.25% |
| Oxford | 2.00% | 2.00% |
| Piqua | 2.00% | 2.00% |
| Pleasant Hill | 0.75% | 0.00% |
| Riverside | 1.50% | 0.75% |
| South Charleston | 1.25% | 1.25% |
| South Lebanon | 1.00% | 0.50% |
| South Vienna | 1.00% | 0.00% |
| Springboro | 1.50% | 1.00% |
| Springfield | 2.40% | 1.20% |
| Tipp City | 1.50% | 1.50% |
| Tremont City | 1.00% | 0.00% |
| Trenton | 1.50% | 1.50% |
| Trotwood | 2.25% | 2.25% |
| Troy | 1.75% | 1.75% |
| Union | 1.50% | 1.50% |
| Vandalia | 2.00% | 2.00% |
| Waynesville | 0.75% | 0.00% |
| West Carrolton | 2.25% | 2.25% |
| West Milton | 1.50% | 0.00% |
| Xenia | 2.25% | 1.50% |
| Yellow Springs | 1.50% | 1.50% |
Sources: Columbus Income Tax Division, Regional Income Tax Agency, various municipal websites
Confirm tax rates with your local municipality.
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