Questions about Local Income Taxes (Columbus, Gahanna: credit, taxi, property taxes)

[MiMeQu]

We are moving to the Columbus soon and I had some questions concerning local taxes. From what I was able to see online, it appears that you pay local income taxes to the city where you work as opposed to where you live. Is this correct? We are from PA, and there, you pay local income taxes to the city/town where you live, not where you work. Instead, you pay a $52 fee to the city where you work as part of an occupational privilege tax.

I will use a hypothetical for the questions we have. From what I have seen online, the City of Columbus has a 2.5% income tax. Unless I am mistaken, I think I read where you pay taxes to the city where you work first, then to where you live, if applicable. So my questions are:

1. If I work in Columbus (2.5%) and live in a town where the local tax is 2%, am I correct that you would pay no taxes to the city where you live since you would get a credit for the taxes you paid to Columbus, which would offset any taxes to where you live?

2. Second, what if you worked in Columbus and lived in a town where the local tax is 3% (I don't know if this is possible, but let's pretend for purposes of this hypothetical). Does this mean that I would pay 2.5% to Columbus, but then I would still have to pay 0.5% to where I live since I would get a 2.5% offset since I paid that to Columbus?

3. If you have to pay taxes to two places (if #2 is correct), does your employer take the taxes out of your paycheck for both places that you have to pay taxes to, or just the one where you work? As an example, if I work in Columbus and live in Dublin, and owe taxes to both, will my employer pay the taxes out of my paycheck to both places or just to Columbus and then I have to make quarterly payments to where I live?

4. Can you recommend a good website that goes through the Ohio taxing structure, from income taxes to property taxes, etc.?


I would appreciate any assistance with these questions. We are trying to understand as much as we can about the tax structure in Ohio and how it differs from PA, but it is not always clear when you read something online.

[MiMeQu]

Since this post is not generating any comments, I wanted to try to clarify what I was asking.

If there is anyone that works in Columbus but lives in the suburbs, can you please explain how your local taxes are handled? From what I have been reading, it seems you would pay taxes to Columbus, but you may also have to pay taxes to the place where you live depending on the tax rate (if it is higher than the Columbus tax rate).

I wanted to know if this is correct and whether your employer takes out the taxes for both places (where you work and live) or just where you work and then you have to make the quarterly payments to where you live.

I would appreciate any input. Thanks.

[Tenzo]

What your employer does and what is legal required is not always the same thing.

Your understanding is generally correct. But if you have a employer in the area I suggest you talk directly with them. I can be reasonably sure that your situation is more common than unique.

Most people I know have Columbus tax taken out as the tax is not negotiable. Does not make any difference where you live, Columbus takes their cut.

Then at the end of the year they 'true up' with where they live. Contact whatever area you are going to live for the exact details.

[Cleveland_Collector]

Originally Posted by MiMeQu

Since this post is not generating any comments, I wanted to try to clarify what I was asking.

If there is anyone that works in Columbus but lives in the suburbs, can you please explain how your local taxes are handled? From what I have been reading, it seems you would pay taxes to Columbus, but you may also have to pay taxes to the place where you live depending on the tax rate (if it is higher than the Columbus tax rate).

Yes, that is usually the case. It will depend on the town, however. Some towns do not require their residents to pay income tax. They only require the people working in the town to pay the tax.

I wanted to know if this is correct and whether your employer takes out the taxes for both places (where you work and live) or just where you work and then you have to make the quarterly payments to where you live.

I would appreciate any input. Thanks.

No. The employer is only required to withhold the taxes from within the corporation limit that it resides. If you worked in a place where the tax rate was 2.5% and the town you resided in had a tax rate was 3.0% AND they required residents to pay income tax, you would have to pay the extra 0.5% when filing your return.

http://www.ritaohio.com/map/m_map.htm

[MiMeQu]

Thank you all for the information. It is very helpful. We want to be prepared for when we move to Columbus. Things are different in PA. Here, you pay taxes to the city where you live, not where you work. For the city where you work, you pay a $52 yearly fee, that is it (there are some exceptions for "distressed" cities). We wanted to know how different it was in Ohio.

[Bodycount]

If you live in columbus and work in another city.. then you first pay city tax to the city in which your work is located. then you pay tax to columbus.

columbus is 2.5% tax. you won't be paying more then that.

for example if you worked in Gahanna, you would be paying their full tax of 1.5% to Gahanna, then you would be paying 1.0% tax to Columbus.. making a total of 2.5%.

you always pay city tax where you work first.. then city tax where you live.

[MiMeQu]

Thank you for the clarification. As I stated before, it is different in PA. You pay income taxes to the place where you live only. For where you work, you pay a $52 tax each year.