Ohio House Bill 5 (HB 5)

Pursuant to the passage of Amended Substitute House Bill 5 in December 2014, new municipal income tax guidelines mandated by the State of Ohio have been established effective with Tax Years beginning January 01, 2016 and after. 

Tax returns and payments for Tax Years beginning prior to January 01, 2016, regardless of the actual filing or payment date are unaffected by the provisions of HB 5.

Details of the new Ohio municipal income tax guidelines can be found in Chapter 718 of the Ohio Revised Code (ORC) located at:  http://codes.ohio.gov/orc/718.

Numerous changes are mandated by HB5, but those requiring action in early 2016 (for Tax Year 2016 and after) include the following:

  •  Changes to filing due date for employer withholding:  Monthly Withholding remittance and payment must be received by the tax administrator no later than the 15th day of each Calendar Month. Quarterly Withholding remittance and payment must be received by the tax administrator no later than the 30th day of each Quarter.  

  • Changes to Monthly and Quarterly Withholding thresholds:  Employers must remit Monthly if withholding in the previous calendar year exceeded $2,399 or if the amount required to be withheld during any month of the previous calendar quarter exceeded $200.  See ORC §718.03
  • Withholding guidelines for employers with transient workers; and for those employers qualified as a "small employer". See ORC §718.011
  • Changes to estimated tax payment requirements and due dates:  Estimated payments are required for businesses and individuals expecting to owe $200 or more in non-withheld tax.  Click Here for he Due Dates  See ORC §718.08  
  • Changes to penalties and interest:

             1.   Penalty on unpaid income tax and unpaid estimated income tax:
                   15% of the amount not timely paid.
             2.   Penalty on unpaid withholding tax:
                   50% of the amount not timely paid.
            
3.   Penalty for failure to file timely return:
                   $25 per month of fraction thereof, regardless of tax
                   liability, up to $150 per return.
            
4.   Interest will be imposed per annum on all unpaid income tax,
                   unpaid estimated income tax, and unpaid withholding tax.  See ORC §718.27