Ohio’s General Assembly in June of 2021 passed a provision in the state’s budget bill that helps some employees. Municipal income taxes will only be owed to cities if an employee works there for more than a certain amount of time, according to The Sun.
Work From Home Employees Tax Refund
Workers who work from home in a township that does not have their own income tax and has their local taxes deferred by their employer and compensated to the city where the offices are located would be reimbursed. Local services such as police, fire, paramedics, parks, and code enforcement are all paid for by income taxes in many Ohio cities. Taxes also pay for road repairs and snowplows. So, where one municipal income taxes go every year has many other impacts, as per Dayton Daily News.
According to The Repository, city treasurers are preparing for higher than usual refunds. There is no way of knowing how employees working from home will affect city tax revenues. A city’s future operations may be affected by the need to issue refunds due to a change in state law.
Legal Challenges Are Pending On Court
A legal statement must be signed by a representative of the employer in many Ohio cities. Refund requests must be accompanied by a signed log sheet from the employee’s time spent working outside of the city listed on the request, and it is now mandatory in Canton. Traveling to and from work does not qualify as time spent working in Canton, according to the city.
In March 2020, Ohio lawmakers passed legislation stating that even if employees worked from home outside of those cities during the pandemic, they would be subject to city income taxes based on their employer’s primary place of business. Legal challenges to the constitutionality of Section 29 of House Bill 197 are currently pending in the courts of Ohio.
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