A House Bill 5 Summary for You, the Taxpayer

Shirley Wu, CPA gets you up to speed on the changes involved with House Bill 5:



Starting this year, there are a lot of changes to Ohio municipal tax under House Bill 5, which was passed in late 2014. We are listing some key provisions here and want to make you aware of them so you will not be subject to possible penalties and interests. Contact us if you have any questions. We are always here to help!

  • Municipal Income tax withholding
    • Municipal tax withholding deadline for monthly and quarterly filers is now changed to 15th of the month. Previously, many municipalities had allowed until the end of the month.
    • Taxes must be remitted monthly if collected taxes exceeded $2,399 in the previous calendar year or exceeded $200 in any month during the previous calendar quarter. Otherwise, the tax must be remitted quarterly.
    • Municipalities can require taxes be remitted semimonthly if withheld taxes exceeded $11,999 or $1,000 during any month during the prior calendar year.
    • Taxpayers with estimated annual tax liability to a city that is under $200 can pay annually.
  • Municipal Income tax
    • Taxpayers may file an affidavit with a municipal tax administrator to certify the taxpayer is no longer required to file tax returns in the municipality.
    • Taxpayers will receive an automatic municipal tax filing extension if they timely filed a federal extension.
    • Form 2106 expenses (unreimbursed employee business expenses) are deductible to the extent deducted for federal tax purpose.
    • Gains and losses that are generated by a resident taxpayer’s different pass-through entities and reported on schedule C, E & F may offset each other during the year in which such gains and losses were generated. The offset provision only applies to resident individuals.
  • Occasional Entrant Treatment
    • The number of days for the “casual” entrant exemption is increased from 12 to 20 per calendar year.  An individual may work in a non-principle-place-of-business municipality without incurring income tax liability there if such individual works there 20 days or less. This exemption does not apply to professional athletes, entertainers and public figures.
    • Requires a business that reasonable anticipates that it will be providing services in a municipality for 21 days or more in a calendar year to withhold municipal income taxes in that city for all employees from day one.
  • Other
    • Mailbox Rules: taxpayers are considered to timely file any tax return if it’s placed in the mail and postmarked by the due date.