Ohio Governor Mike DeWine signed House Bill 197 on March 27, 202
However, pursuant to House Bill 197, employers should continue to withhold state and local income taxes based on the employee’s principal place of work city, regardless of working from their residence during the pandemic. Employers will not be considered to have income tax nexus during the COVID-19 pandemic while impacted employees work from their homes.
So how does this impact employees working remotely and does it potentially offer a refund opportunity?
Under HB 197 employers continues to withhold state and local taxes based on the employee’s principal place of work city. However, will wages earned while working in a township (which does no impose a local income tax) or a city that does not offer full credit for wages earned in your work city be refundable? Currently there is no guidance that addresses this question. However, it is prudent for any employees working remotely to keep track of days worked at home, so if there is a refund opportunity, they have the documentation to take advantage of it.
Meaden & Moore will continue to monitor further developments in this area and provide additional updates as they become available. In the meantime, if you have any questions please feel free to contact us.