Ohio Withholding laws & HR compliance analysis

Ohio Withholding: What you need to know

Ohio law requires employers to withhold state income taxes from all wages of residents and wages for services performed in Ohio of certain nonresidents. Withholding is not required for employees who are residents of Indiana, Kentucky, Michigan, Pennsylvania, or West Virginia.
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Ohio has conformed its income tax statutes to the Internal Revenue Code. Thus, compensation that is subject to federal withholding is also subject to state withholding.
Exclusions. Payments for some services, including the following, are exempt from withholding:
• Agricultural labor
• Domestic service in a private home or in a local sorority or fraternity
• News carriers under the age of 18
• Services performed by employees who earn less than $300 in a calendar quarter and are not regularly employed
• Civilian spouses of military service members, when both the spouse and service member have residency in another state
Contributions to a cafeteria plan or a deferred compensation plan are exempt from withholding.
In addition to the state income tax, some Ohio cities, towns, smaller communities, and school districts impose their own income tax on the wages of residents and nonresidents. Employers must withhold and remit school district income tax from employees who reside in a taxing school district.
Registration. All employers maintaining an office or transacting business in Ohio and required to withhold federal income tax must register within 15 days after the liability to withhold begins. Register online through the Ohio Business Gateway (OBG) at http://gateway.ohio.gov and follow the instructions for Ohio Withholding Registration.
Payment deadlines. Employers that withheld ...

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