Grandview City Notes: Workers need to ensure employer is paying taxes to proper municipality
Before the COVID-19 pandemic, “WFH” was an abbreviation that might have seemed like nothing more than misspelled word.
Today, we see it used everywhere to represent what so many of us have and continue to do: work from home. We can debate the merits, drawbacks and overall implications to the country’s workforce, but one thing is certain: changing one’s physical location of work has the potential to dramatically impact Grandview Heights and every other city in Ohio’s revenue stream by flipping the city income-tax revenue model on its head.
Under state law, municipal income tax is required to be withheld by employers and paid where the work is performed.
Before the pandemic, this meant that if someone worked in Columbus and lived in Grandview Heights, they paid Columbus income taxes. When many employees began working from home during the pandemic, the Ohio General Assembly temporarily allowed employers to continue to withhold to the city the work was performed in prior to the pandemic.
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On Dec. 31, this accommodation for employers will end. This means employers will return to withholding city income tax based on where the work is performed. For those who will continue working from home, this is now their home city, or may be a hybrid of their home city and the city of the employer’s office.
If you reside and work for an employer in Grandview Heights, there is no need to change anything. If your employer is based anywhere but Grandview Heights and you are working from home, please ask your employer to begin withholding taxes for Grandview Heights as of Jan. 1. Even if you do not work from home every day, your employer is required to withhold income taxes for Grandview Heights on the days you do work from home.
While it may not appear to matter where you pay your income taxes at first glance, it matters greatly for city services. Unlike the school district, which is funded primarily through property tax, the city’s general fund revenue is 65% funded by municipal income tax. Grandview Heights, like most municipalities in central Ohio, has a 2.5% municipal income tax on wage earners and corporate net profits earned in our city.
Our ability to provide modern infrastructure, emergency services, trash collection, parks programs and all our other services rests mostly on this local income-tax revenue. makes all the difference in our ability to operate.
We need your help to make sure your tax information is correct as of Jan. 1, so that we can continue to provide the highest quality services with a stable, predictable budget that captures income tax earned locally. Some employers may continue withholding in accordance with your pre-pandemic status, but we ask everyone to comply with state law by confirming your arrangement with whoever handles payroll for your employer.
If you have questions, our finance department is ready assist. You may contact Joe Curtin at (614) 439-7778 or Scott Gill at (614) 481-6207 or email tax@grandviewheights.org with any questions. For other income-tax questions not related to working from home, visit grandviewheights.gov and select “Income Tax” under the services tab.
Greta Kearns is the mayor of Grandview Heights.
This article originally appeared on ThisWeek: Grandview City Notes: Workers need to ensure employer is paying taxes to proper municipality
