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Ohio municipal tax withholdings impact the University

June 25, 2021

As COVID-19 restrictions are eased throughout the state, some people may be returning to the office, continuing to work from home, or a hybrid of the two. Because of this, University Human Resources will be collecting work location data from all University faculty and staff in the coming weeks. 

Ohio University is required by law to withhold municipal income tax on wages earned in the municipal corporation (ORC Sections 718.01 and 718.03), which means that the law requires employers to withhold taxes based on the location where the work is actually performed.

During the COVID-19 restrictions, Section 29 of Ohio House Bill 197 allowed employers to withhold tax for employees working from a temporary remote setting as if they were working at their original workplaces pre-COVID. This applies to wages earned from March 9, 2020, to June 18, 2021 (with a 30-day extension), when Governor Mike DeWine lifted Executive Order 2020-01D, Declaring a State of Emergency. The Ohio House and Senate are each reviewing bills that would address municipal taxation for remote workers, which means that the entire state is waiting for the final outcome of this situation. 

What does this mean for me as a University employee?

While no action is needed to be taken by employees at this time, University Human Resources is working with Office of Information Technology to systemically capture and validate employee work location and tax data, which will allow the University to withhold municipal taxes for employees that are working off campus in a flexible workplace arrangement. The project team is working to update a section in My Personal Information to enable employees to declare current remote work status and capture any hybrid work arrangements.

As the project team works to get a solution in place, they are also closely watching pending legislation in the Ohio House and Senate to see what will need to be done in order to comply with Ohio tax law. As additional information becomes available and action is required, University Human Resources will provide updates to the University community.

Questions? Contact the Employee Service Center at 740-593-1636 or uhr@ohio.edu

This article also appeared in Ohio News.