COLUMBUS, Ohio (WCMH) — With tax season on the horizon, Ohio’s municipal income tax is just one piece of the puzzle for state residents getting ready to prepare their returns.
One local accountant said it’s also the piece that can cause strife for both longtime and newer Ohioans.
“There’s a saying among us in the accounting field, that if you can prepare taxes in Ohio, you can prepare taxes anywhere in the United States,” said Jerry Rhodes, the president of Columbus-area tax preparation agency BBI Accounting.
The Ohio Revised Code enables its numerous political subdivisions to set rates and collect local income taxes, both on the people who live in them and work in them. Unlike most other states, where a resident might file federal and state returns, Ohioans in many political subdivisions have to file an additional local tax return.
Local income taxes can bring a late winter or early spring headache, particularly for newly-minted Ohio residents, Rhodes said. “It’s the single largest source of aggravation for us,” he said.
What is RITA?
Close to half of Ohio’s more than 2,000 municipalities levy local income taxes, according to an analysis of Ohio Department of Taxation data. To administer them, some cities and villages in central Ohio and around the state run their own local tax departments.
Others outsource to third-party agencies. Rhodes said that in central Ohio, for subdivisions that are outsourcing, the most widely used tax administration service is Ohio’s Regional Income Tax Agency — or RITA.
It handles local taxes on behalf of a number of smaller Ohio cities and towns, including 17 suburbs and villages in Franklin County. RITA maintains a list of all of the places it provides administration services for here.
“It does make sense to go ahead and contract with these larger collections agencies,” Rhodes said.
Taxpayers can generally begin to prepare and file earnings for the previous year in January. Tax Day — or the day when federal income tax returns are due — falls on Tuesday, April 18 in 2023.
Rhodes, who recommended new Ohio residents consider hiring a tax preparer for their first year in the state, said anyone considering using a preparer this tax season should seek out services sooner rather than later.
For state and local taxes, the state Department of Taxation’s website offers resources for taxpayers, including a database of local income tax rates here.