Q: Do I have to file a City tax return?
A: You must file and register with the City of Mt. Healthy if you are a resident of the City, if you work in the City, or if you operate a business in the City. Filings are done through the Regional Income Tax Agency. All non-residents with income taxable to the City of Mt. Healthy that is not fully withheld by an employer are required to file a Mt. Healthy income tax return. All entities operating a business or doing business within the City of Mt. Healthy must file an annual Mt. Healthy income tax return on net profits/losses.
Q: What is the tax rate and what is taxable?
A: The tax rate is 2.0% on gross wages, salaries, commissions, and net profits (including self-employed individuals and rental property owners as well as residents). Deferred compensation is taxable to Mt. Healthy in the year earned.
Q: What if I pay the city where I am employed?
A: Mt. Healthy allows credit up to 1.60% if your wages are subject to another city (not county) tax.
Q: What is my liability if I move from the City during the year?
A: The income is prorated if your residency was less than the full tax year. Residents moving out of the City must notify the tax office of their move-out date and file a final return for that year (includes all apartment tenants/residents).
Q: Do I need to file if I am retired or permanently disabled?
A: No tax return is required if you are fully retired with no earned income or if you are permanently disabled, but you still must register. Retirement benefits, social security, interest or insurance payments are not taxable. Any business venture, such as rental property, is considered earned income and a filing would be necessary.
Q: Do I need to file if my employer withholds Mt. Healthy tax?
A: If your employer withholds Mt. Healthy tax from your pay and you are a resident of Mt. Healthy, you are required to file an annual tax return even though no tax is owed.
Q: Who must file a Declaration of Estimated Tax?
A: Anyone who does not have Mt. Healthy tax withheld by their employer. Estimates are based on the previous years tax due and are payable quarterly.
Q: When are quarterly payments due?
A: April 15, June 15, September 15, and December 15 (returns are due April 15).
Q: Can I pay my taxes with a credit or debit card?
A: Yes, but taxpayers who elect to pay their municipal income tax bills by credit or debit card will incur a 2.75% service charge. This fee is charged by a third party vendor per credit card transaction and is not paid to RITA. Taxpayers electing to pay by check or via ACH will not incur this service charge.
Q: What is the due date for tax filings?
A: For individuals, tax filings are due on or before April 15th. For business, tax filings are due on or before April 15th or within four (4 months) from the fiscal year end. If the 15th falls on a weekend or federal holiday, the due date will be the following business day.
Q: What items should I include with my tax filing?
A: W-2 form(s), 1099 form(s), and any applicable schedules(s) and/or form(s) and supporting documentation, as appropriate.
Q: What types of taxable income should I report?
A: Qualifying wages (see below), tips, commissions and other compensation including sick pay, vacation pay, supplemental unemployment benefits paid by the employer (SUB PAY), severance pay, settlements, income from wage continuation plans (includes retirement incentive plans and buyouts), contributions made by or on behalf of employees to non-qualified or qualified deferred compensation plans (e.g. 401K plans), bonuses, directors fees, fringe benefits (e.g. car allowance), disability pay if received as a benefit from employment (includes third party plans), stock options as indicated by amount on W-2; gambling winnings as reported on Form W-2G and/or Form 5754; net profits from profession and/or business operations, rental property, partnerships, enterprise or other business activity. Income taxable by the city may differ from income taxed by the IRS.
Q: What counts as qualifying wages?
A: Usually the amounts in the Medicare wage box of the W-2s are the qualifying wages effective January 1, 2004 . Qualifying wages for the municipality includes wages defined in Section 3121(a) of the IRS code plus any amounts not included in the Medicare wage due to some Medicare exemptions (e.g. government employees employed by an entity prior to April 12, 1986 ). Previously, the taxable wage was the gross wage prior to any deductions and included cafeteria plans (e.g. 125 plans) that are not included in the Medicare wage.
Q: What types of non-taxable income should NOT be added to or deducted from taxable income?
A: Interest, dividends, capital gains (unless considered ordinary income), royalties (if derived from intangible property); alimony received; military pay and allowances; Social Security benefits, welfare benefits, unemployment insurance benefits, workers’ compensation; pension, proceeds from qualified IRS-defined retirement plans.
Q: What is the extension policy for filing taxes?
A: Extension requests for filing must be made in writing and received on or before the due date for filing the return. The extension, if granted, only extends the filing date of the return. Payment is due on or before April 15, of the current year, or within four (4) months from the fiscal year end.