Cincinnati Taxes (Mason: credit, how much, home)

[Hilbe]

I need some assistance in understanding how taxes work in Cincinnati. I'm going to be working downtown Cincinnati and assume they're going to be taxing me 2.1% on my income. Now lets say I decide to live in Mason, OH. I believe they have a 1% income tax as well. Do I pay 1.1% to Cincinnati and 1% to Mason? Or how does that work? Also, what happens if I decide to live in an area without an income tax such as Deerfield Township or West Chester.

Someone please help me figure this out...the tax pros/cons of living in different suburbs when working downtown.

[jlawrence01]

It is generally ADDITIVE. There MIGHT be a credit in your home community.

Personally, I would look at UNINCORPORATED areas like Anderson Township where there are no local income taxes.

Most of my friends have moved their IT consultancy services out of the city to avoid the taxes.

[Wilson513]

Just about all of the Cities taxing income give credit in one way or another for your payroll tax in another taxing authority. Here is Masons' FAQ:

What is the individual income tax rate in Mason?
The tax rate is 1%. In 2006 and prior years, residents employed in another city that had an earnings tax received a maximum credit of up to 50% of the tax due on the portion of their earnings taxed by the city where employed. For tax year 2007, residents employed in another city that has an earnings tax received a maximum credit of up to 65% of the Mason tax due on the portion of their earnings taxed by the city where employed. The maximum credit will be 80% of the tax for 2008 and 90% of the tax for 2009. In tax year 2010 and beyond, the maximum tax credit will be 100%. Even if no tax is due, you will still be required to file a return.


http://imaginemason.org/home.php?ID=113 (broken link)

[Cincy-Rise]

Originally Posted by jlawrence01

Most of my friends have moved their IT consultancy services out of the city to avoid the taxes.

How many friends do you know that own IT consultancy companies?

[Hilbe]

Originally Posted by jlawrence01

It is generally ADDITIVE. There MIGHT be a credit in your home community.

Personally, I would look at UNINCORPORATED areas like Anderson Township where there are no local income taxes.

Most of my friends have moved their IT consultancy services out of the city to avoid the taxes.

What if I do live in an unincorporated area? Am I still expected to pay the Cincinnati tax since I work down there?

[Wilson513]

Originally Posted by Hilbe

What if I do live in an unincorporated area? Am I still expected to pay the Cincinnati tax since I work down there?

Answer: Yes. You pay Cincinnati income tax on income you earn in Cincinnati. 2.1% If you live in an area with no tax, end of explanation. If not, most all of the cities and taxing authorities in Ohio give credit for the taxes paid to the taxing authority where a person works. Some bedroom communities with no payroll or industry do not give any credit. This is an exception to the general rule.

[Ohiogirl81]

It's typical of most cities and villages in the area to reciprocate up to the value of their own income tax rates. Cincinnati's 2.1 percent always comes out of your paycheck; how much you're in hock to your city/village of residence varies depending upon the reciprocal rate.

In tax year 2010 and beyond, the maximum tax credit will be 100%.

Whoa.

I guess Mason has succeeded in its goal of transforming every piece of vacant land into shopping centers and office parks.

[Cincy-Rise]

This just came out today:

Townships trying new tax strategy | Cincinnati.com | Cincinnati.Com

With the current financial system our municipalities are in, we will be finding new ways to bring in an extra tax base (residents), or cut spending (can only go so far).

I say we legalize marijuana, tax it and regulate it like alcohol!

[jkratze1]

Originally Posted by Ohiogirl81

I guess Mason has succeeded in its goal of transforming every piece of vacant land into shopping centers and office parks.

Nope, the Western Row Golf Course is still for sell.

[tom hester]

im being forced to pay cinn city taxes for 2005 and2006 is there any way to keep from paying intrest and penalty iwork out of state// i offered to pay my taxes but not the penaltys what are my option s