The regular tax return filing deadline is April 15. However, due to the Washington D.C. Emancipation Day holiday being observed on April 16, 2018, Tax Day for 2017 return filings is on the following Tuesday April 17, 2018. This is also the deadline for City tax returns.

Q: When is the Centerville tax office open?
A: The Income Tax Division is open from 8:00 AM to 4:30 P.M., Monday through Friday, except holidays.

Q: What is the Centerville income tax rate and who does the income tax apply to?
A:
Through tax year 2016, the Centerville income tax rate is 1.75%. As of January 1, 2017, the Centerville income tax rate increased to 2.25%. The tax is applicable to all residents of the city as well as all non-residents working within the city. The tax also applies to all businesses that are either located in the city or performing services in the city. The tax rate is levied upon all gross wages, salaries and other compensation, and all other business net profits.

Q: Who is required to file Centerville income tax returns?
A: All Centerville residents are required to file an income tax return annually, even if no tax is due. Non-resident individuals, sole proprietorships, partnerships, limited partnerships, limited liability companies,limited liability partnerships, associations, corporations, and S corporations that own rental properties, conduct business, perform services, solicit sales, operate or maintain an office in Centerville must file, even if no tax is due. Retired individuals who  no longer have taxable income may be exempt from filing after notifying the Income Tax Division. Non-resident individuals working in Centerville are not required to file a tax return if Centerville tax was withheld.

Q: What schedules or supporting documents should I attach to my return?
A: Most taxpayers will have completed their Federal tax return before completing their Centerville tax return. A copy of the Federal tax return and Federal schedules or forms containing any information that relates to the information on the City return should be attached. Examples: W-2, Schedule C, Schedule E, Schedule K, Schedule K-1, Form 1065, Form 1120.

Q: Are retired persons required to pay city tax?
A:
Retirees are not required to pay city income tax on their income from Social Security or income from federally qualified retirement plans.  However, retirees are subject to the tax if they have any other types of earned income. There is no age limit, per the Ohio Revised Code, for paying municipal taxes on otherwise taxable earned income.

Q: Are students exempt from the tax?
A: No, being a student has no effect on your city tax liability.  All residents of Centerville who are 18 years of age or over are required to pay city income tax.

Q: Why doesn't the city tax interest income?
A: Per the Ohio Revised Code, municipalities in Ohio are prevented from taxing most types of intangible income including interest, dividends and capital gains.

Q: If I have W-2 income and a schedule, can I use a schedule loss against my W-2 wages?
A: No, due to a change to the Tax Ordinance, beginning in 2010, schedule losses may no longer offset wages.

Q: I have a rental property that shows a loss each year after expenses. Should I include that in my return?
A: Yes, anyone having a rental property located in Centerville is required to file a return and include a copy of their Schedule E or applicable schedule of income and expenses for the rental.  A return is required each year even though losses may have been incurred.  Also, any Centerville residents having rental properties are required to file on those properties no matter where the properties are located.

Q: My W-2 has differing amounts in the federal income box, the local income box and the medicare box. Which amount should I show as taxable wages for my city income tax return?
A: Beginning in 2004, the Ohio Revised Code states that qualifying wages are the taxable wages for the City. Qualifying wages are typically Medicare wages (Box 5 on the W-2).Because of various federal deferral programs available, taxable wages may not always be the same for federal tax purposes, Medicare purposes, and city tax purposes.Taxable gross wages, for city purposes, is any income not expressly excluded by the Centerville Income Tax Ordinance and includes any income earned, received, accrued or in any other way set apart unto Centerville residents or unto any non-residents performing services in Centerville.

Q: I live in Centerville but work in another city and have tax withheld for that city. Do I get credit for that against my Centerville tax liability?
A: Yes, credit is allowed for taxes paid to another city. Through tax year 2016, the allowable credit is limited to 1.75% of the wages taxed by the other city. As of tax year 2017, the allowable credit is limited to 2.25% of the wages taxed by the other city.

Q: When are tax returns due?
A: Individuals and calendar-year entities are required to file by April 15th.  Fiscal-year entities are required to file on the 15th day of the fourth month following the end of the fiscal year or period.

Q: How soon can I expect my refund?
A:  Refunds will be issued within 90 days of receipt of the completed tax return with all necessary documents attached. A refund request is not considered complete and will not be processed unless it has all the supporting documents attached. A refund of less than $10.00 will not be made.

Q: My company will not withhold Centerville income taxes.  What can I do?
A: If your company is located in a township or a municipality with a lower tax rate, you can ask your company to withhold income tax for Centerville.However, the law does not require this “courtesy” withholding. If the company does not withhold for Centerville (or another City), you will need to make estimated tax payments to Centerville. Estimated payments are based on 100% of last year’s tax liability or 90% of current year’s tax liability.  Either the 100% of last year’s or the 90% of current year’s tax liability must be paid by January 31st, or an underpayment penalty will be  assessed. 

Q: When are estimate payments required?
A: Every person who anticipates a net tax liability of at least $200 is required under Ohio law to make estimated tax payments. The Declaration of Estimated Tax and first quarter payment is calculated and paid with the tax return. Second quarter is due June 15th; third quarter is due October 15th; fourth quarter is due December 15th. Quarterly statements will NOT be sent; however, quarterly vouchers are available on the city’s website.

Q: If my tax preparer filed my tax returns electronically for me last year, why did I receive a letter stating that I had not filed with Centerville?
A: Unlike federal and state income tax returns, Centerville is unable to accept electronic filings at this time. Residents must mail their Centerville   tax return or bring in their W2s and we will prepare the Centerville tax return at no charge.

Q: I work in Dayton and pay Dayton taxes. My spouse works in a township and doesn’t have any tax withheld. If Dayton’s tax rate is 2.5% why can’t we take credit for all of the 2.5% and offset my spouse’s tax liability to Centerville?
A:
Each city retains the taxes it collects through withholding. As a courtesy, Centerville, like most other cities, allows credit for taxes paid to another city, up to its own tax rate. The credit allowed is calculated by multiplying the wages taxed by another city by 1.75% through tax year 2016 (unless the other city’s rate is lower, then it is the actual tax withheld). The credit allowed is calculated by multiplying the wages taxed by another city (Box 18 on the W-2) by 2.25% (unless the other city’s rate is lower, then it is the actual tax withheld). For tax years 2016 and prior, Centerville’s tax rate was 1.75%; therefore, credit for tax paid to another city is calculated by multiplying the wages taxed by another city (Box 18 on the W-2) by 1.75%.

Q: If I file an extension request, why am I charged a penalty and interest when I file and pay by the extended date?
A: An extension only extends the time you have to file your tax return. It DOES NOT extend the time you have to pay your tax liability.

Q: What types of income are taxable and should be reported on the Centerville income tax return?

  • Wages, salaries and other compensation
  • Bonuses, stipends, and tip income
  • Commissions, fees and other earned income
  • Employer supplemental unemployment benefits (SUB pay)
  • Strike pay
  • Vacation pay
  • Employee contributions to retirement plans & tax deferred annuity plans (including Sec. 401k, 403b, 457b, etc.)
  • Profit sharing
  • Contributions made on behalf of employees to tax deferred annuity programs
  • Reimbursements in excess of deductible expenses
  • Employee contributions to costs of fringe benefits
  • Employer provided educational assistance, and/or reimbursement (taxable to the same extent as for federal taxation)
  • Royalties, if not derived from intangible property
  • Stock Options (taxed when exercised, valued at market price less option price on the date the option is exercised)
  • Employer paid premiums for group term life insurance (taxed to the same extent as for federal taxation)
  • Compensation paid in goods or services or property usage (taxed at fair market value)
  • Excess employee discounts
  • Income from wage continuation plans (including retirement incentive plans, severance pay and golden parachute payments)
  • Income from guaranteed annual wage contracts
  • Prizes and gifts if connected with employment
  • Director fees
  • Income from jury duty
  • Executor fees
  • Union steward fees
  • Income from partnerships, estates or trusts
  • Net profits of businesses, professions, sole proprietorships, etc.
  • Net rental income
  • Farm net income
  • Ordinary gains as reported on Federal Form 4797
  • Disability pay if received as a benefit of employment (includes third party plans)
  • Income received as a result of a covenant not to compete
  • Gambling and lottery winnings (no deduction for gambling losses)

Q: What types of income are non-taxable and should not be reported on the Centerville income tax return?

  • Interest and dividend income
  • Welfare benefits 
  • Social Security 
  • Income from federally qualified pension plans 
  • State unemployment benefits and Worker’s compensation
  • Compensation received for serving as a precinct election official unless it exceeds $1,000 annually 
  • Proceeds of life insurance 
  • Alimony 
  • Active duty & reserve military pay (including National Guard when on active duty) 
  • Earnings of persons under 18 years of age 
  • Capital gains
  • Third party Sick pay

 

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