Income Tax Difference Between Springfield OH and its Surrounding Areas (Dayton: get credit, school district)

[adenlee]

Hello friends. I decide to accept a job offer in Springfield, OH. However, when I was comparing Springfield to its surrounding areas such as Enon and South Vienna, I noticed that there is a big difference in income tax. For example, Springfield has an income tax rate of 5.5% while the income tax rate for Enon and South Vienna is only 3.5%. If I work in Springfield but live in one of those surrounding areas with a lower income tax, do I need to pay income tax for both my residential and working places? Thanks in advance!

[woxyroxme]

City income tax in Springfield is 2%.

City of Springfield Income Tax Rate

If you live in another city you will have to file where you live and you will get credit for taxes paid to Springfield but some cities will only give partial credit and may have you pay 0.5%. That is how it is in Lebanon now that we have all these new people living here that don’t work in town.

[ohio_peasant]

Townships don't charge local income tax; nearly all "cities" do (local exceptions are Beavercreek and Bellbrook). Townships can however charge "school district income tax", if the township belongs to the school-system of the host "city". For example, the City of Xenia charges a local income tax and a school district tax. Xenia Township, which is a rural expanse around Xenia, has no local income tax, but charges the same school district tax.

If you work in a taxing jurisdiction, but don't live there, then you'll owe local income tax to said jurisdiction, on your earnings there. For example, last year I did some work for the U of Dayton, in the city of Dayton. But I live in a township. I owed income-tax on my earnings at the U, but not on my other earnings, the latter having been earned elsewhere.

The lowest-cost arrangement is to live and work in a township or a non-taxing city. For instance, live and work in Beavercreek.

It is sometimes true that a higher-taxing jurisdiction offers better services, stronger schools and thus higher property values. The shining example is Oakwood. But more often, taxes are high because the local earnings-base is low. Kids still have to go to school, and somebody has to pay for that. Services may be sparse, and school-quality mediocre as best, despite taxes being high. An example is Xenia City. I would imagine that Springfield is much like Xenia.