Effective changes beginning January 1, 2016

The Ohio General Assembly legislation passed many municipal income tax changes to Ohio Revised Code section 718 (ORC 718) including, but not limited to, what is/is not taxable, filing requirements, thresholds and deadlines, penalty and interest rates, as well as how the tax is administered and enforced.  Note that tax filings and payments for tax years beginning before January 1, 2016 are subject to the ordinances, rules and regulations of each municipality as they were in effect at that time, regardless of the date of filing or payment.

Estimated Tax Payments and Their Due Dates:

You are not required to make estimated payments unless your estimated tax liability for the year (after credits and withholdings, if any) is $200 or more.  If your estimated tax liability is less than $200, you may still declare an estimate.

Penalty and interest may be imposed for late or non-payment of your estimated tax payments.  See section for Penalty and Interest Rates.

Minimum Thresholds – Filing Refunds:

When filing a tax return with the Village of Gibsonburg, you are not required to remit payment if the tax due (after credits, estimated tax payments and withholdings) is $10 or less.  A RETURN MUST BE FILED REGARDLESS OF BALANCE.

Overpayments of $10 or less will not be refunded.

Filing an Extension:

It is not necessary to file your Federal Extension with the Village of Gibsonburg by April 15th(*) to extend the time to file your municipal income tax return with us.  HOWEVER, a copy of the Federal Extension must be provided when filing your extended return with the Village of Gibsonburg on or before October 15th(*)REMEMBER, an extension to file IS NOT an extension to pay any tax amount due.

(*) Date will coincide with the Federal annual income tax return filing deadlines and subject to change each year if the filing deadline is extended due to weekends and/or legal holiday.

Changes to Qualifying Wages:

“Third-party sick pay” is exempt from withholding and taxation.

“Clergy wages” that are exempt from federal FICA/Medicare withholding are NOT EXEMPT for qualifying wages of municipal income and are subject to tax.  Please note that the clergy housing allowance exemption remains.

Taxable Income:

Lottery, sweepstakes, gambling and sports winnings, winnings from games of chance, and prizes and awards are taxable, with no minimum/maximum thresholds.

Rules regarding the taxation of income of individuals under the age of 18, stock options and non qualified deferred compensation are set forth in each municipality’s income tax ordinance.  For more information see the “ “ and select Special Notes section  that relates to the appropriate tax year.

ORC 718 now requires every Ohio municipality with an income tax to allow losses incurred on or after January 1, 2017 to be carried forward for up to 5 years.  The law requires a 5-year phase in period at a rate of 50% each year through tax year 2023.  There is no change to the net operating loss carry forward permitted by a municipality, if any, for tax years 2015 and 2016.