CLEVELAND, Ohio – If you’ve been working at home during the coronavirus pandemic, away from your normal work city, the Regional Income Tax Agency (RITA) is giving you a chance to request a refund on taxes that were withheld from your regular, pre-pandemic work city.
But here’s the catch; you may never see the money.
The RITA refund form cautions:
“A refund of the tax withheld for your pre-COVID-19 work municipality, while you worked from home or another location, may not be available until litigation over this issue is completed. … RITA will hold your request for refund in a suspended status until this litigation is concluded.
“Should the conclusion of this litigation determine that a refund is allowed, your request for refund will be processed at that time. Should the conclusion of the litigation determine that a refund is not allowed, you will receive a notice that a refund is not available to you.”
The litigation in question is a lawsuit filed by the the Buckeye Institute against the city of Columbus and Ohio Attorney General Dave Yost, asking to invalidate a state law that permitted taxes for the normal work to be collected during the pandemic when work shifted to home or elsewhere.
Essentially, the Buckeye Institute argues that it is not legal to tax people where they neither work nor live. Permission for this tax during the pandemic was part of a larger emergency coronavirus-relief bill state lawmakers approved in March.
However, it could be months, if not years, before the case is complete. The case has not gone to trial yet, and the outcome ultimately could be appealed by either side up to the Ohio Supreme Court.
What’s at stake could be hundreds, or even thousands of dollars, for some people. It depends where one works and where one lives (and is currently working).
For example, someone making $50,000 who lives in a township without an income tax but works in city where the income tax rate is 2%, would pay $1,000 over a full year in local income taxes. That potentially could be refunded.
But some people receiving such a refund would then have to turn around and pay taxes to their residency city, if they are working there. The gains for these people would range from a full refund to perhaps nothing at all, depending on the tax rates and normal credits for their home city.
The refund paperwork is on form 10A posted on the RITA website. The form, not new, routinely offers a variety of special circumstances for which a person may be eligible for refunds.
The special COVID-19 work circumstance was just added. Filers must pick a reason for their refund request. The one tied to COVID-19 reads:
“Due to COVID-19, days worked outside of municipality for which the employer withheld tax. Attach a copy of your W-2 Form, a completed Log of Days Out Worksheet on page 3, and a completed Calculation for Days Worked Out of RITA on page 3. Your employer must complete and sign the Employer Certification Parts 1 and 2 on page 2. The availability of a refund is dependent upon the outcome of pending litigation. Requests will be held until this litigation is resolved.”
A similar option has not been posted on the CCA website – the Cleveland taxing division that processes taxes for several communities that are not part of RITA.
Read an in-depth look at the issue: https://www.cleveland.com/datacentral/2020/08/explaining-ohios-maze-of-city-income-tax-rates-and-credits-and-why-you-should-log-where-youve-been-working-thats-rich.html