23 January 2018 Ohio 2018 withholding tax guidance issued, no change to withholding tables for 2018, Ohio school district withholding rates now available, 2017 Forms W-2 reminders The Ohio Department of Taxation has released employer withholding tax guidance for calendar year 2018 to its website with no changes to the income tax withholding rates or limits that have been in effect since August 1, 2015. (Email response to inquiry/telephone conversation, January 17, 2018.) As previously reported, the Department announced late last year that the 2018 income tax withholding instructions would be delayed due to the late enactment of the federal Tax Cuts and Jobs Act. The supplemental rate of withholding remains at 3.5%. (Email response to inquiry/telephone conversation, January 17, 2018, July 31, 2015; Ohio Administrative Code 5703-7-10.) According to the Department's publication, 2018 Employer's Withholding Instructions, as in the past, only those employers filing 250 or more Forms W-2 (or more than 250 Forms 1099-R) are required to submit Forms W-2 for calendar year 2017 on CD by January 31, 2018. Paper Form IT 3 must accompany the CD. Employers filing fewer than 250 Forms W-2 may voluntarily file on CD with the Department. Online filing is not available for filing state Forms W-2 or 1099-R. Specifications for filing the 2017 Forms W-2 are available here. All employers are required to maintain copies of Forms W-2 and or 1099-R for a period of at least four years from the due date of the forms. If the information is not submitted to the Department on CD, the Department may request W-2s or 1099-Rs periodically when conducting compliance programs. All employers must electronically submit an annual reconciliation for calendar year 2017, Form IT 941, by January 31, 2018. Employers are instructed to not send Forms 1099 (such as 1099-MISC, 1099-B, 1099-DIV, etc.) for which Ohio income tax withholding is not required, differing from the federal requirement to submit Forms 1099-MISC with nonemployee compensation shown in box 7. With respect to reporting these income statements, the state of Ohio participates in the combined federal/state program and receives this information from the IRS. The Department has also released the publications, 2018 School District Income Tax Withholding Instructions and Expirations, New School Districts, Renewals and Rate Changes Effective 1/1/2018. These publications contain the instructions and changes to withholding and remitting school district withholding tax for calendar year 2018. Employers are required to file state and school district income tax withholding returns and make payment of the withheld taxes through the Ohio Business Gateway on a monthly or quarterly basis using Form SD 101, Employer's Payment of School District Income Tax Withheld, which is usually due on the same due date as the Ohio state income tax withholding return Form IT 501, Employer's Payment of Ohio Income Tax Withheld. (Note: School district income tax withholding is not required to be paid on a partial weekly basis.) Employers must submit Form SD 141, School District Employer's Annual Reconciliation of Tax Withheld for calendar year 2017 by January 31, 2018. Forms W-2 provided to employees must include school district withholding tax information. Boxes 19 and 20 on the Form W-2 (or any available area) are used to show this information. The Department asks employers to show the four-digit school district number and name in box 20 when reporting school district withholding. Employers should identify both the amount of school district income tax withheld and the school district (by its four-digit number) on the Form W-2. According to the Department, this added information will assist in distinguishing between city and school district withholding amounts. Because of the limited space in box 20, the Department will accept the 4-digit school district number in combination with an abbreviation of the school district name or the letters "SD" for "school district". Many Ohio localities have both a city income tax as well as a school district income tax. The Department has discovered that thousands of Forms W-2 each year list a city name twice with two different tax withholding amounts — one for the amount of city income tax withheld and one for the amount of school district income tax withheld. This has caused some individuals to mistakenly claim the wrong withholding amount or add both withholding amounts together when filing their city and/or school district income tax returns. For assistance in locating the correct school district number and name, employers may access a website called The Finder which provides the school district number for every school district in Ohio. A payment schedule, listing the Ohio and school district employer withholding tax due dates for remitting and reporting can be found here. For more information on withholding taxes in Ohio, see the Department's website. Document ID: 2018-0165 |
