Employer obligations

Ohio requires withholding of all applicable taxes for Ohio residents and nonresidents working in Ohio, subject to the conditions detailed in the table below.
Employee Situation Withholding Requirements
Lives and works in OH Work location: required
Resident location:
  • School district: required
  • Municipal: optional (courtesy withholding)
Lives in another state, but works in OH Work location: required
Resident location: check with state agency
Lives in OH, but works in another state Work location: check with state agency
Resident location: optional (courtesy withholding)

Identify local tax jurisdictions

You are responsible for contacting your local municipalities to determine what local taxes an employee is subject to. The Ohio Local Tax Finder website can help locate rates and taxes. When using the website, click both of the following buttons:
  • School District
  • Municipal Tax
Click the Zip Code link on the following screen, enter the residence or work location zip code, select the month and year for time period for which you are searching, then click Lookup. The page will display applicable local tax municipalities and their associated tax rates.
  1. Go to the American FactFinder website at http://factfinder2.census.gov.
  2. Click on Advanced Search and then click the SHOW ME ALL button.
  3. Click on the Geographies link on the left.
  4. Click on the Address tab in the pop-up window that appears:
  5. Enter in the address (either work or home) in question:
  6. Take note of the following two lines in the generated report:
  • County Subdivision -- This will be the appropriate township to be set up
  • School District -- This will be the appropriate school district to be set up
If an employee lives and works in different communities, enter the addresses of both communities, and find the applicable municipal taxes. The system will withhold the work location tax first. If the residence tax is selected as a courtesy to the employee, the system will also calculate the residence tax, reduced by the allowable credit from the work location.
Occasionally, the website won't populate the correct city and county based on the work location address. In that case, contact Payroll Support for assistance. Please note that the OH Local Tax Finder may display a municipal tax as a total rate, even though the tax may be composed of two or more separate communities that aren't itemized on the website. All of the applicable communities should be selected in the employee's local tax profile to withhold the correct total tax from their paychecks.
Also note that the OH Local Tax Finder does not provide tax information for municipalities that fall inside a joint economic development district ("JEDD") or a joint economic development zone ("JEDZ"). If your municipality falls into a JEDD or JEDZ, please contact your local income tax office for further assistance.

Employee and company local tax setup

Intuit Online Payroll/Intuit Online Payroll for Accountants

  1. Click Employees > employee's name.
  2. Click Edit in the Taxes and Exemptions section
  3. In the Local section, select all local tax option.User-added image
    All available local taxes must be selected. Our system will run the local taxes through our tax engine and accurately withhold the correct ones. Any wage thresholds, minimum and maximum amounts, rates, and city/county caveats are automatically handled by our system. (For example, when you select both a resident work location tax, our system will properly withhold the work location tax.)
  4. Click OK.
  5. Once the local tax setup is complete, Intuit Online payroll/Intuit Online payroll for accountants will calculate the local taxes for you. Filing and paying of local taxes are not supported by the product.

Intuit Full Service Payroll

  1. Click the Employees tab
  2. Select the employee's name.
  3. Click Edit in the Taxes section
  4. In the Local Taxes section select the local taxes that apply and click Save.
  5. Once the employee is setup, you will then want to setup your company's local tax setup
  6. Contact customer care to get assistance in your local Ohio company tax setup, 866.640.9987 option 2.
  7. After both employee and company local tax setup is complete, you are now ready to make your local tax payments, which Intuit Full Service Payroll submits for you.

QuickBooks Online Payroll

  1. Click Employees > employee's name.
  2. Under the Employee details, click edit (pencil) icon beside Pay.
  3. On the question about employee's withholding, click edit (pencil) icon.User-added image
  4. Go to Local Taxes and select the local tax jurisdiction.User-added image
  5. Click Done.
  6. Once the local tax setup is complete, QuickBooks Online Payroll will calculate the taxes for you. Filing and paying of local taxes are not supported by the product.

QuickBook Online Payroll Full Service Payroll

  1. Click Employees > employee's name.
  2. Under the Employee details, click edit (pencil) icon beside Pay.
  3. On the question about employee's withholding, click edit (pencil) icon.User-added image
  4. Go to Local Taxes and select the local tax jurisdiction.User-added image
  5. Click Done.
  6. Once the employee is setup, you will then want to setup your company's local tax setup
  7. Contact customer care to get assistance in your local Ohio employer tax setup, 866.729.4662 option 1
  8. After both employee and company local tax setup is complete, you are now ready to make your payments, which QuickBooks Online Payroll Full Service submits for you.

Calculation

Number of allowances - only applies to school district taxes

Ohio school district (SD) tax factors in the number of allowances the employee claimed on their OH IT-4 (employee allowance certificate). The number of allowances reduces the taxable wages for the employee, and the SD tax is then calculated off the reduced wages.

Reciprocity between work and resident location - only applies to county and city taxes

  • Employee lives and works in municipalities that collect local tax
    • Withhold the full amount for city of employment.
    • Withhold tax for city of residence, reduced by the credit amount allowed by the city of residence. The resident tax is reduced by either all or a portion of the work tax.
  • Employee lives in OH, but works in another state
    • Withhold applicable city and/or county tax at work location.
    • Withhold tax for city of residence, reduced by the credit amount allowed by the city of residence. The resident tax is reduced by either all or a portion of the work tax.
  • Employee lives in another state, but works in OH
    • Withhold the full amount for city of employment.

Request account information

If you don't know your local employer identification number (EIN) or payment schedule for OH local taxes, please contact School District Income Tax at 800.282.1780.