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Finance Office - Income Taxes

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1. Who is required to file a Wadsworth tax return?

All residents of Wadsworth 18 years of age or older who had reportable income are required to file an income tax return, even if all the tax you owe was withheld. In addition, all nonresidents are required to file if they engaged in any business activity within the City and had no tax withheld from their earnings, or they have rental property located in Wadsworth. Each business located or performing services within the City is required to file. There is no threshold or benchmark for income or loss; returns are required without regard to the amount.

2. If I'm retired, do I have to file a tax return?

Retirees are only required to file and pay any tax due if they have earned income of any amount (such as wages for part-time employment, lottery/gambling winnings, rental income/loss, or if they engage in any business activity.) No one pays tax on interest or dividend income, and retirees are not taxed on pensions or Social Security. A retiree who has no taxable income must file an Individual Declaration of Exemption form only the first year they are completely retired (had no taxable income at all), and attach a copy of page 1 of the Federal tax return. By doing this, the account will be inactivated by RITA and nothing would need to be filed in the future for city taxes unless there is earned income.

Any non-retiree over the age of 18 who has no taxable income must file an Individual Declaration of Exemption form each year. Anyone who is on permanent disability can request their account be inactivated by contacting the City Income Tax Officer at 330.335.2745, or by contacting RITA at 800.860.7482.

3. I am under 18 years old and work part-time. Do I need to file a tax return?

No one under age 18 is required to file a return. However, if your employer withheld Wadsworth taxes, you can and should request a refund, using Form 10A from the RITA website. You will need to provide your W-2 form and a copy of your driver's license, birth certificate or ID card for verification of age.

4. When is the annual City tax return due?

The filing deadline is the same as your Federal and State returns, usually April 15. However, waiting to file until the last couple of weeks or the last day may result in a long wait, whether you come in for assistance or file at the RITA website. You can file your city tax return as soon as you have all of your tax information. Whether you come in for assistance, or file at the RITA website, your return will be filed electronically, and you do not need to submit anything further unless you are contacted by RITA. You can pay when filing with a debit or credit card, or via direct debit from your bank account, or you can have RITA bill you for any balance due (penalty and interest charges may apply even if you pay the balance due when filing.) NOTE: As of October 1, 2018, there is a 2.75% fee charged when paying by debit or credit card. This fee is charged to RITA by a third party vendor and is not retained by RITA or the City of Wadsworth. This fee does not apply when paying by ACH. When paying by ACH, you must provide your bank routing and account number.

You can also e-file or obtain the tax forms you need at the RITA website. All completed paper returns, as well as returns prepared by your tax professional, must be postmarked by the due date if mailed to RITA, or dropped off in the Finance Office to be date stamped before the due date.

5. What if I cannot get my taxes done by April 15?

A federal income tax filing extension also acts as an extension of time to file your City tax return. You do not need to submit a copy of the extension by the annual filing due date. When you file your City tax return, we suggest that you attach a copy of your extension to potentially avoid a late filing penalty. If you have not requested or received a federal extension, you may receive a six-month extension for filing your City tax return by submitting Form 32-EXT to RITA on or before the annual filing due date. This form is available at the RITA website. Remember: An extension to file the annual return is not an extension to pay - the tax owed is still due by the annual filing due date.

6. If I am a resident and work in Wadsworth, do I still have to file a tax form?

Yes. The City has a mandatory filing requirement, so every resident over the age of 18 must file an annual return, even if your employer withholds all of your taxes.

7. How do I know whether I live and/or work in the City of Wadsworth?

You cannot always rely on a mailing address to determine the city in which you live or work. The U.S. Postal Service establishes mailing addresses based upon the post office that services the address. Similarly, you cannot rely on your school district, since those do not always follow city boundaries.

If you are a registered voter, it is easy to determine your city of residence; if you voted for the mayor, you live in the city.

If you moved recently, or are not registered to vote, you may call the City Income Tax Officer at 330.335.2745 to verify if you live in the city, or whether your Wadsworth employer is located within the City.

Employers may also call the Income Tax Officer to verify whether their employees are working within Wadsworth City limits.

8. If I work outside of Wadsworth and my employer withholds income tax for the city where I work, do I still have to pay tax to Wadsworth?

Yes, you have to pay a residence tax on income taxed by another city. You receive credit for up to 1% of the tax that you pay to the city where you work, so if you are paying at least 1% to your employment city, your Wadsworth residence tax is 0.4%. (As of January 1, 2012, the Wadsworth City income tax rate changed to 1.4%, effective for income earned/paid after January 1, 2012; for tax years prior to 2012, the Wadsworth City income tax rate was 1.3%.)

9. How do I find the Income Tax rate of the city where I work?

The City of Columbus Income Tax website  shows income rates for every municipality in the State of Ohio. To view detail data for listed municipalities, you must configure your system to allow pop-up windows to appear while viewing data from this site.

10. When do my taxes have to be paid?

The City of Wadsworth income tax ordinance states that if your tax liability is greater than $200, at least 90% of your current year tax liability or 100% of last year's tax liability must be paid by the due date (see note below) to avoid potential penalty and interest charges on underpaid taxes. We can estimate your taxes based on your pay stub, and you can pay the estimated amount by the due date. After you get your W-2, your actual tax liability for the year will be calculated, and any estimates paid deducted from the amount due. Overpaid taxes will be credited to next year's liability or a refund will be issued under certain circumstances. 

Note: For individual taxpayers, for tax year 2018 and beyond (returns due in 2019 and beyond), the final due date for paying estimated tax is January 15. This is a change in the law mandated by the State. For business taxpayers, the final due date remains December 15.

11. I owe taxes and am unable to pay. Should I still file my return?

Yes, you absolutely should file your return by the due date whether or not you are able to pay the entire amount of tax that you owe. You will receive a bill for the balance owed including late payment penalty and interest charges. You should contact RITA to make arrangements for payment of the billed charges.

12. My spouse and I file separately for Federal and State taxes. Do we have to file the same way for Wadsworth taxes?

No, and in fact, if you are still married, since there are no advantages or disadvantages one way or the other, we would prefer you file a joint return. However, if you need to file separately, you may do so, and you should continue to do so for each year thereafter.

13. How can I receive bills for my taxes so I can pay them during the year instead of having to come up with all the money at once?

You are required by State law to pay estimated taxes only If your estimated tax for the year is greater than $200. You can receive quarterly bills for your estimated taxes by completing the estimated tax section on the annual tax return or by creating an account at the RITA website and setting this up. Effective for tax years beginning in 2016, you will not be penalized for not making estimated tax payments if your tax liability is less than $200, provided your return was timely filed.

14. I do not want to be billed for or pay quarterly estimated taxes. How can I avoid a penalty?

Effective for tax years beginning in 2016, you will not be penalized for not making estimated tax payments unless your tax liability is greater than $200. There are two ways to avoid being penalized: 

1. When you file your annual tax return, calculate and pay the total you estimate you will owe for the next year, along with any balance due for the current year, or 
2. Pay by January 15 of the following year, an amount equal to 90% of your total tax liability for the prior year, or 100% of your prior year tax liability. (Your total tax liability for the prior year is not necessarily the balance you owed when you filed your tax return.) Please note: For individual taxpayers, beginning with tax year 2018 (returns filed in 2019), the final due date to pay your estimated taxes is January 15. This is a change in the law mandated by the State. For businesses, the deadline to pay estimated taxes is still December 15.

If you do one of these two things, you will not be subject to penalty or interest, provided your annual tax return is timely filed.

15. Last year I paid my taxes in full when I filed my return, and then I got a bill for penalty and interest. Why did I get this bill?

There could be many reasons why you received this bill. The best thing to do is contact RITA at 800.860.7482, and they will be able to tell you why you got the bill. Also, the City's Income Tax Officer can explain this to you. You can reach the Officer at 330.335.2745 or via email: CNelson@wadsworthcity.org.

Please note: Penalty and interest are charged on all unpaid income tax and unpaid employer withholding tax. The interest rates are set annually by state law. The interest rate applied to each calendar year is the July Federal Short-Term Rate, rounded to the nearest whole percent, plus 5% (Federal short-term rates are found here.)  For tax year 2018, the interest rate is 7%. For tax year 2017, the interest rate was 6%. For tax year 2016, the interest rate was 5%.

16. Why does the City use an outside company for the administration of our taxes?

Outside agencies have available many resources for compliance to which the City cannot gain access. Additionally, we have evaluated the cost of doing all of the work associated with administration of income taxes versus the cost of outsourcing, and it was decided several years ago that contracting with an agency was the most cost-effective way to go. For many years we used CCA (The Central Collection Agency), and as of January 1, 2016 we changed to RITA (The Regional Income Tax Agency.) As of this date, all tax filings should be sent to RITA, even for prior years. 

We work closely with these agencies, and if you ever have any issues or concerns with them, please contact the City's Income Tax Officer at 330.335.2745 or CNelson@WadsworthCity.org.

17. What are the top ten mistakes made when completing a city income tax return?

Failure to:

1. Use the largest wage figure shown on the W-2
2. Accurately report local tax withheld
3. Report income as required from Federal schedules C, E, F, etc., and/or attach the Federal extension if applicable
4. Deduct business or rental loss carryovers from prior years
5. Deduct unreimbursed employee business expenses if applicable (no longer deductible beginning in tax year 2018)
6. Pay estimated taxes
7. File a return for the year you move into or out of the City
8. Pro-rate income for a partial year residency
9. Include payment
10. E-file or mail the completed return!

If reading this list raises a question for you, please call the City Income Tax Officer at 330.335.2745.

18. How much income tax does the City collect and how is the money used?

On a cash basis, the City of Wadsworth collected $9,221,134 in income taxes in 2017. For more information, please visit the City of Wadsworth Tax Allocations page.