Are there any changes for tax year 2022?
Beginning tax year 2016, there are significant changes. These changes are a result of legislation passed by the State of Ohio. Major changes are listed below:
- Due dates of estimated payments to April 15, June 15, September 15, and December 15. Please note that beginning tax year 2018, the 4th quarter due date has been changed to January 15.
- Gambling winnings are taxable.
- Late filing fees ($25 per month or portion thereof), penalty for late payment (15%), and interest charged are now uniform for the entire state.
- Beginning tax year 2017, the State of Ohio made changes to the amount of loss carry-forward that may be used on your return. Up to 100% of the allocated losses remaining from tax years 2014-2016 may still be used. The deduction of losses from tax years 2017-2018 is limited to the smaller of the following amounts: (1) 50% of the unused 2017 loss plus 50% of the 2018 loss, or (2) 50% of the net non-W-2 income left after any 2014-2016 losses have been applied. Note: Losses cannot be used to offset W-2 income.
What is the individual income tax rate in Mason?
For tax years 2012 and prior, the tax rate was 1%. The 2013 through 2019 safety services tax rate was 0.12%, for a combined tax rate of 1.12%. The combined rate remains at 1.12% for 2020.
I pay local taxes to the city where I work. Can I get a credit on my Mason taxes?
Yes. Residents who work outside the city and pay income taxes to the city where they work can take a full credit on their Mason taxes, as long as the credit doesn’t exceed the amount they paid to the other city. The combined credit for taxes paid to other cities and the Resident Homeowner Credit is limited to 1.12%. Residents may get a refund for amounts paid or withheld for Mason if the credit results in an overpayment. Please remember that even if no tax is due, you are still required to file a return.
Who must pay the individual income tax?
All residents of the City of Mason, regardless of age and income. Even if you are not required to file a federal tax return, you must file a Mason tax return if you have taxable income.
I am a college student but use my parents address for mailing purposes. Do i need to file?
Yes, unless you can provide proof that you have changed your permanent residence to your school address. Acceptable proof may include a copy of your driver’s license showing school address, voter registration change, and the first page of your Federal tax return.
Can my taxes be deducted from my paycheck?
Municipal income taxes deducted from your paycheck are paid to the municipality in which you work. If you work in Mason, your Mason income tax should be deducted from your paycheck by your employer and paid to the city for you. If your employer is not in Mason but is willing to withhold Mason taxes for you, your employer can easily set up a withholding tax account by completing the Business Income Tax Questionnaire (PDF) and mailing or faxing it to the Tax Office.
I don’t work in Mason. Is my entire tax payment due in April?
Yes and No. All of your taxes must be paid by April 15th of the following year, but you must also file a declaration of estimated tax and make quarterly payments throughout the tax year. Penalties are incurred if 90% of your taxes are not paid by December 15. Beginning tax year 2018, 90% must be paid by January 15.
What is the due date for filing my return or quarterly payment?
All residents must file an annual tax return on or by the Federal Tax Return due date (usually April 15th). Quarterly estimated payments are due on April 15th, June 15th, September 15, and December 15 for tax years 2016 and 2017. Beginning tax year 2018, the due dates are April 15, June 15, September 15, and January 15.
My employer collects income tax for Mason, but I have other income as well. Do I have to file quarterly estimated payments?
Yes, if the amount deducted by your Mason employer will not be at least 90% of the amount of taxes you owe for the year. Otherwise, you may be subject to penalties.
What types of income are taxable?
- Qualifying wages, commissions
- Vacation pay
- Tips, bonuses, gifts in lieu of pay, gratuities
- *Car allowance, personal use of employer-provided vehicle
- Wage continuation plans
- Supplemental unemployment pay, severance pay
- *Employer paid group term life insurance premiums
- *Incentive payments
- *Sick and disability pay
- *401K plans and the like
- *Deferred compensation
- *Employer-provided property, board, lodging and similar items
- Prizes, including trips, connected with employment
- *Stock option from employee stock purchase plan
- *Moving expense reimbursement
- *Profit sharing
- Jury duty pay
- Income from a guaranteed annual wage contract
- Beginning 2016, lottery or gambling winnings
*For additional information, please see the Tax Ordinance.
What types of income are NOT taxable?
- Military pay or allowances paid to active duty members of the Armed Forces, Reserves, National Guard, or Peace Corps
- Pensions and distributions reported on a 1099-R
- Cafeteria plans and the like
- Social Security benefits
- Unemployment compensation paid by the state or federal government
- Disability benefits (does not include sick pay or short-term disabilities)
- Interest, dividends, capital gains or other income from intangibles
- Parsonage housing allowance of ordained ministers
- Gain from the conversion or cancellation of indebtedness
- Income used for unreimbursed business expenses reported on a federal form 2106 reported on Federal Schedule A less 2% AGI
- Compensation of a precinct election official
- Lottery or gambling winnings prior to tax year 2016
How do I know if my employer is withholding Mason taxes for me?
Look at box 20 on your W-2. It should show the name of the municipality for which taxes are withheld. This information may also be on your paycheck stub.
When I fill out my Mason tax form, which boxes on my W-2 do I use?
Typically, the qualifying wages found in box 5 are subject to tax. For exceptions, see the General Information Sheet. Box 19 shows the amount of taxes withheld. Box 20 names the municipality for which the taxes were withheld.
Why is my “Medicare” amount (Box 5) higher than the “Wages, tips, other compensation” (Box 1) that I use on my federal tax return?
Many people find that their qualifying wages are higher because they include all types of earnings, some of which may be deferred for federal income tax purposes. These amounts are taxed for municipal purposes because they are excluded from municipal taxes upon retirement.
If I overpay my taxes, can I get a refund?
Yes. The refund amount will be figured on your Mason tax return. Beginning tax year 2016, the minimum amount of overpayment refunded or credited to the next year must be greater than $10. A 1099-G form will be filed with the IRS for all refunds credited or issued and the amount will also be reported to the city where you reside (if not Mason).
Can I get an extension of the filing deadline?
An extension may be requested by any business or individual unable to complete their tax return by the deadline. Forms are available online. Beginning with tax year 2016, obtaining a federal extension will automatically extend your Mason due date to the approved federal due date. However, the federal government does not share information with the City of Mason, so it is recommended that this form or a Mason Extension Request (PDF) Form ER be completed and remitted to the City.
An extension of time to file is NOT an extension of time to pay. Payment of any balance due must accompany a request for extension to file. Penalty and interest are charged for late filing and late payment.
Can a return be amended after it is filed?
Yes. An amended return must be filed to report additional income and to pay any additional tax due, or to claim a refund of overpaid taxes.
How are payments applied to my account?
All payments are first applied to interest charges, then penalties, then against past due taxes in the order in which they became due, and then against all current taxes due. For example, if you owe a balance for 2014, plus penalty and interest, your 2015 payments will apply to the interest and penalties for 2014, then the balance due for 2014, and finally, the amount due for 2015.
I lived in Mason for only part of the year. Do I have to use a special form?
No. Instructions for partial year residents are included with the tax form.
What is the penalty and interest charge?
- Interest shall be imposed at the rate calculated based on the federal short-term rate, rounded to the nearest whole number per cent, plus five percent per annum on all unpaid income tax, unpaid estimated income tax, and unpaid withholding tax. Interest shall be charged per month, or fraction of a month.
- With respect to unpaid income tax and unpaid estimated income tax, a penalty equal to fifteen percent of the amount not timely paid shall be imposed
- With respect to returns other than estimated income tax returns, the Municipality shall impose a monthly penalty of twenty-five dollars for each failure to timely file each return, regardless of the liability shown thereon for each month, or any fraction thereof, during which the return remains unfiled regardless of the liability shown thereon. The penalty shall not exceed a total of one hundred fifty dollars in assessed penalty for each failure to timely file a return.