Tax on working from home
CLEVELAND (WJW) — Ohioans who worked from home in 2021 can apply for a refund of local income taxes withheld by their employer in another municipality.
“These would be people working from home or in another location that is not their traditional office,” said Amy Arrighi, chief legal adviser at the Regional Income Tax Agency.
The pandemic has prompted more companies to shift to remote working or a hybrid schedule for employees.
Ohioans who did some of their work outside the tax municipality can claim reimbursement for that time.
Arrighi said Ohioans who work from home in a location with lower income taxes than where the employer’s office is located, such as a township, would benefit the most.
Those who live in a city or town with an income tax rate that matches the employer’s rate will not receive any money back.
“If they live in a community with an income tax, they might just transfer money from one city to another,” Arrighi said.
Eligible workers must submit a form with details to the local tax agency when filing taxes.
RITA’s Form 10-A, available online here, requires details, including a time log and employer signature.
“Every taxpayer’s situation is going to be different depending on where they live,” Arrighi said.
The City of Cleveland Division of Taxation Reimbursement Worksheet states for telecommuting: “Reimbursement request must include supporting proof of claim, which may include, but is not limited to, a telecommuting agreement, a summary of clock hours of all telecommuting hours, regular hours, hours off benefits and certification from the employer attesting to the number of days worked at the main place of employment, etc.
A spokesperson for the city of Cleveland had not yet responded to a request for details on the potential impact of the refunds on the city’s finances.
The refund marks a change from 2020, when Ohio lawmakers early in the pandemic voted to allow cities to continue collecting taxes from commuters who worked from home.
“A city only has the jurisdiction to tax and exercise power over the people who live or work there,” said Jay Carson, senior attorney at the Buckeye Institute.
The Buckeye Institute has filed four lawsuits challenging the 2020 legislation.
Carson said the group plans to appeal its Franklin County case to the Ohio Supreme Court on Friday, seeking similar refunds for 2020.
“We believe the Supreme Court of Ohio should take up this case because it is of great public interest and of great impact to citizens and also to municipalities,” Carson said.
While a decision on 2020 will come from the courts, for 2021 and beyond tax is due where the work was done.
“A lot of taxpayers have never had to do this before, so we’re preparing for a lot of calls and trying to make it as easy as possible,” Arrighi said.
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