The Income Tax Division is open from 8:00 AM to 4:30 P.M., Monday through Friday, except holidays.
What is the Centerville income tax rate and who does the income tax apply to?
As of January 1, 2017, the Centerville income tax rate increased to 2.25%. For tax year 2016 and prior, the Centerville income tax rate was 1.75%. The tax is applicable to all residents of the city as well as all non-residents working within the city. The tax also applies to all businesses that are either located in the city or performing services in the city. The tax rate is levied upon all gross wages, salaries and other compensation, and all other business net profits.
Who is required to file Centerville income tax returns?
All Centerville residents are required to file an income tax return annually, even if no tax is due. Non-resident individuals, sole proprietorships, partnerships, limited partnerships, limited liability companies,limited liability partnerships, associations, corporations, and S corporations that own rental properties, conduct business, perform services, solicit sales, operate or maintain an office in Centerville must file, even if no tax is due. Retired individuals who no longer have taxable income may be exempt from filing after notifying the Income Tax Division. Non-resident individuals working in Centerville are not required to file a tax return if Centerville tax was withheld.
What schedules or supporting documents should I attach to my return?
Most taxpayers will have completed their Federal tax return before completing their Centerville tax return. A copy of the Federal tax return and Federal schedules or forms containing any information that relates to the information on the City return should be attached. Examples: W-2, Schedule C, Schedule E, Schedule K, Schedule K-1, Form 1065, Form 1120.
Are retired persons required to pay city tax?
Retirees are not required to pay city income tax on their income from Social Security or income from federally qualified retirement plans. However, retirees are subject to the tax if they have any other types of earned income. There is no age limit, per the Ohio Revised Code, for paying municipal taxes on otherwise taxable earned income.
Are students exempt from the tax?
No, being a student has no effect on your city tax liability. All residents of Centerville who are 18 or older are required to pay City income tax. College students are taxed based on legal residence. Typically, college students maintain their legal residence at their parent(s) home while attending school; therefore, the student would be required to file a Centerville return and include all earned income.
Why doesn't the city tax interest income?
Per the Ohio Revised Code, municipalities in Ohio are prevented from taxing most types of intangible income including interest, dividends and capital gains.
If I have W-2 income and a schedule, can I use a schedule loss against my W-2 wages?
No, due to a change to the Tax Ordinance, beginning in 2010, schedule losses may no longer offset wages.
I have a rental property that shows a loss each year after expenses. Should I include that in my return?
Yes, anyone having a rental property located in Centerville is required to file a return and include a copy of their Schedule E or applicable schedule of income and expenses for the rental. A return is required each year even though losses may have been incurred. Also, any Centerville residents having rental properties are required to file on those properties no matter where the properties are located.
My W-2 has differing amounts in the federal income box, the local income box and the medicare box. Which amount should I show as taxable wages for my city income tax return?
Beginning in 2004, the Ohio Revised Code states that qualifying wages are the taxable wages for the City. Qualifying wages are typically Medicare wages (Box 5 on the W-2). Because of various federal deferral programs available, taxable wages may not always be the same for federal tax purposes, Medicare purposes, and city tax purposes.Taxable gross wages, for city purposes, is any income not expressly excluded by the Centerville Income Tax Ordinance and includes any income earned, received, accrued or in any other way set apart unto Centerville residents or unto any non-residents performing services in Centerville.
I live in Centerville but work in another city and have tax withheld for that city. Do I get credit for that against my Centerville tax liability?
Yes, credit is allowed for taxes paid to another city. As of tax year 2017, the allowable credit is limited to 2.25% of the wages taxed by the other city. For tax year 2016 and prior, the allowable credit is limited to 1.75% of the wages taxed by the other city.
When are tax returns due?
Individuals and calendar-year entities are required to file by April 15th. Fiscal-year entities are required to file on the 15th day of the fourth month following the end of the fiscal year or period.
How soon can I expect my refund?
Refunds will be issued within 90 days of receipt of the completed tax return with all necessary documents attached. A refund request is not considered complete and will not be processed unless it has all the supporting documents attached. A refund of less than $10.00 will not be made.
My company will not withhold Centerville income taxes. What can I do?
If your company is located in a township or a municipality with a lower tax rate, you can ask your company to withhold income tax for Centerville. However, the law does not require this “courtesy” withholding. If the company does not withhold for Centerville (or another City), you will need to make estimated tax payments to Centerville. Estimated payments are based on 100% of last year’s tax liability or 90% of current year’s tax liability. Either the 100% of last year’s or the 90% of current year’s tax liability must be paid by the fourth quarter due date, or an underpayment penalty will be assessed.
When are estimate payments required?
Every person who anticipates a net tax liability of at least $200 is required under Ohio law to make estimated tax payments. The Declaration of Estimated Tax and first quarter payment is calculated and paid with the tax return. Second quarter is due June 15th; third quarter is due September15th; fourth quarter is due January 15th. Quarterly statements will NOT be sent; however, quarterly vouchers are available on the city’s website.
I work in Dayton and pay Dayton taxes. My spouse works in a township and doesn’t have any tax withheld. If Dayton’s tax rate is 2.5% why can’t we take credit for all of the 2.5% and offset my spouse’s tax liability to Centerville?
Each city retains the taxes it collects through withholding. As a courtesy, Centerville, like most other cities, allows credit for taxes paid to another city up to its own tax rate. The credit allowed is calculated by multiplying the wages taxed by another city by 2.25% (unless the other city’s rate is lower, then it is the actual tax withheld). For tax years 2016 and prior, Centerville’s tax rate was 1.75%; therefore, credit for tax paid to another city is calculated by multiplying the wages taxed by another city (Box 18 on the W-2) by 1.75%.
If I file an extension request, why am I charged a penalty and interest when I file and pay by the extended date?
An extension only extends the time you have to file your tax return. It DOES NOT extend the time you have to pay your tax liability.
What types of income are taxable and should be reported on the Centerville income tax return?
Employee contributions to retirement plans & tax deferred annuity plans (including Sec. 401k, 403b, 457b, etc.)
Contributions made on behalf of employees to tax deferred annuity programs
Reimbursements in excess of deductible expenses
Employee contributions to costs of fringe benefits
Employer provided educational assistance, and/or reimbursement (taxable to the same extent as for federal taxation)
Royalties, if not derived from intangible property
Stock Options (taxed when exercised, valued at market price less option price on the date the option is exercised)
Employer paid premiums for group term life insurance (taxed to the same extent as for federal taxation)
Compensation paid in goods or services or property usage (taxed at fair market value)
Excess employee discounts
Income from wage continuation plans (including retirement incentive plans, severance pay and golden parachute payments)
Income from guaranteed annual wage contracts
Prizes and gifts if connected with employment
Income from jury duty
Union steward fees
Income from partnerships, estates or trusts
Net profits of businesses, professions, sole proprietorships, etc.
Net rental income
Farm net income
Ordinary gains as reported on Federal Form 4797
Disability pay if received as a benefit of employment (includes third party plans)
Income received as a result of a covenant not to compete
Gambling and lottery winnings (no deduction for gambling losses
What types of income are non-taxable and should not be reported on the Centerville income tax return?
Interest and dividend income
Income from federally qualified pension plans
State unemployment benefits and Worker’s compensation
Compensation received for serving as a precinct election official unless it exceeds $1,000 annually
Proceeds of life insurance
Active duty & reserve military pay (including National Guard when on active duty)
Earnings of persons under 18 years of age
Third party Sick pay
Are members of the military required to file Centerville income tax returns?
If you are a member of the United States Armed Forces and your legal residence is in Ohio, you must file a Centerville income tax return. If you are a legal resident of a state other than Ohio, you are not required to file; however, any income received from non-military employment, Centerville rental property or business in Centerville is taxable. An income tax return reporting this income is required.