25
High School Avenue ~ Shelby, OH 44875 ~ (419) 342.3520
Income
Tax Info
Links
Critical
Data
On
May 2005, voters approved a 1% income tax to support Shelby City Schools. This
tax will become effective January 1, 2006 and applies to all individuals who
reside in the Shelby City School District and to any income of estates of decedents
who, at the time of their death, lived in the District. In anticipation of this
date, we wanted to provide answers to commonly asked questions regarding how
the 1% income tax will work.
What income is taxed? The Shelby
City School District income tax uses the same income base as the state
income tax. The following lists show some types of income which are and are
not taxable.
Income that is not taxed: social security benefits; disability and survivor
benefits; railroad retirement benefits; welfare benefits; child support; property
received as a gift, bequest or inheritance; and workers’ compensation
benefits.
Income that is taxed: wages; salaries; tips; interest; dividends; unemployment
compensation; self-employment; taxable scholarships and fellowships; pensions;
annuities; IRA distributions; capital gains; state and local bond interest (except
that paid by Ohio governments); federal bond interest exempt from federal tax
but subject to state tax; alimony received; and all other sources.
How is the tax collected? School
district income taxes are collected in the same manner as the state income tax:
through employer withholding, individual quarterly estimated payments, and annual
returns.
How will my employer know to withhold the tax from
my paycheck? By law,
every employer maintaining an office or transacting business in Ohio and making
payments of any compensation to an employee who resides in an affected school
district must withhold school district income taxes. The only exception to this
may be federal government employers.
Each year, the Ohio Department of Taxation sends out a notice to all employers
of new school district income taxes that were approved by voters and their obligation
to withhold such taxes.
After January 1st, if your employer has not begun withholding the 1% income
tax, we recommend you advise them that you live in Shelby City
School District and must have this income tax withheld from your check. This
could be accomplished by submitting a completed IT-4 form. The IT-4 form is
available on our web site (http://www.shelbyk12.org/incometax/)
under the “LINKS" section on the left hand column. If they still
refuse to withhold, feel free to contact the Shelby City School
District Office and we will notify the Ohio Department of Taxation.
What must I do if the income tax will not be withheld
from my income? Generally,
quarterly estimated payments are required if a taxpayer expects to be underwithheld
by more than $500 for their combined state and school district income taxes.
Some examples of when this may occur are individuals who work for a federal
government agency which refuses to withhold the income tax from employees’
paychecks or individuals who receive a significant pension from a company or
retirement system that does not withhold school district income taxes.
The Ohio Department of Taxation provides payment vouchers for quarterly estimated
payments and a worksheet for calculating the amounts. Your first payment would
be due April 15th, with remaining payments due June 15th, September 15th, and
January 15th. We will be sure to place these forms on our web site and make
them available in our district office for people who do not have Internet access.
After you make estimated payments for a year, the Department of Taxation will
automatically mail you forms for the next year.
How do farmers submit the school district income tax? As discussed
above, quarterly estimated payments are generally required if a taxpayer expects
to be underwithheld by more than $500 for their combined state and school district
income taxes. A farmer whose total estimated gross income is at least two-thirds
attributable to farming has the option of filing under three different methods.
The farmer must use the same option for school district income tax as he/she
used for filing his/her state and federal returns, unless permission to do otherwise
is granted by the Tax Commissioner.
Must I file an annual return? Yes. Regardless
of how you pay the income tax, you must file an annual school district income
tax return. The filing deadline is the same as for the state income tax (normally
April 15th of the following year). Just like state and federal income taxes,
you may owe additional tax or be due a refund based on your income, amounts
withheld from your pay, and any quarterly estimated payments made.
The Ohio Department of Taxation will be mailing out the first required return
in early 2007 to all district residents (you will not file a return in 2006,
because the income tax was not effective in 2005). Although many of you may
be apprehensive about the need to complete another tax return, be assured that
this return is quite simple.
The first line of the school district income tax return is your Ohio Adjusted
Gross Income taken from line 3 of the state income tax return. An adjustment
to this amount is only required in the event that the taxpayer was not a resident
of the district for the entire year. Next, a subtraction is made for the value
of your exemptions to derive taxable income. Taxable income is then multiplied
times 1% to determine tax liability. A $50 senior citizen tax credit is allowed
against the liability if the taxpayer is 65 years of age or older anytime during
the tax year.
This web page is not intended to be comprehensive guide. If you have further
concerns or questions regarding how the income tax will work, we encourage you
to contact the Ohio Department of Taxation at 1-800-282-1780 or visit their
web site at http://tax.ohio.gov/.
They will be administering the tax on behalf of the district, as they do for
all other school districts across the state that levy an income tax. You are
also always welcome to contact the Shelby City District Office
at (419) 342-3520.
