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Changes in Ownership/Entity Type:
If a change in ownership or in the business entity
Overpayment and Underpayment Recordkeeping
type (such as changing from a sole
Corrections proprietorship to a corporation) occurs and a
Employers required to withhold Ohio income tax new FEIN is issued by the IRS, a final IT 941 or IT
If an overpayment is identified during the must maintain accurate records of all persons 942 annual reconciliation must be filed for the
current calendar year, the employer must make from whom tax is collected for a period of at current Ohio withholding account number and
the correction by reducing the Ohio tax withheld least four years from the due date. the account must be closed. A new employer
reported on the next Ohio IT 501(s) filed or EFT withholding account is required for the newly
payment(s) made until the credit is consumed. Records must include: issued FEIN.
The amounts and dates of all compensation
paid, and taxes withheld by pay period.
If an overpayment or underpayment is identified The names, addresses, school district of Mergers:
after the IT 941 or 4 Quarter/AnnualthIT 942
residence, principal county of employment, If a merger has taken place, the non-surviving
Reconciliation has been filed, the employer and the social security numbers of all entity must file a final Ohio IT 941 or IT 942
must file an amended IT 941 or 4 th
employees receiving compensation. annual reconciliation and notify us of the merger
Quarter/Annual IT by completing a Business Account Update Form
942 Reconciliation reflecting the overpayment The periods of employment, including (BA UF) that can be found on our website at
or balance due. periods during which compensation is paid http://www.tax.ohio.gov/forms.
while absent due to sickness or injury.
Overpayments CANNOT be taken as a credit in a W-2s, 1099s, and IT 3 (if applicable).
subsequent year. SCHOOL DISTRICT WITHHOLDING
Updating the Employer Withholding
If an amended IT 941 or 4 thQuarter/Annual IT 942 Account Information
Reconciliation also involves issuing W-2Cs, an IT Who Must Withhold
3 with the updated withholding tax information Name and address changes can be submitted on
and copies of the W-2Cs must be submitted by the Business Account Update Form (BA UF) Ohio law requires employers to collect the
mail to the employment tax division using the available at http://www.tax.ohio.gov/forms. school district of residence for each employee by
mailing address on the IT 3. providing the Ohio form IT 4.
Closing the Employer Withholding
Employers are required to withhold school
Interest and Penalty Account district income tax from compensation for any
employee who resides in a taxing school district.
Interest is calculated from the return due date Business Closures: This requirement is based on an employee's
until the date the tax is paid. The interest rate for A business that withholds individual income address of residence and applies even if the
calendar year 2023 is 5%. and/or school district income tax from its employer conducts no business or operations in
employee(s), and is closing, may complete the the school district. Failure to withhold will result
Failure-to-File Penalty: in penalties and interest for any unpaid tax even
Ohio Business Account Update Form (BA UF). An
If an employer fails to file the Ohio employer account may also be closed electronically when if the taxes were not withheld.
withholding tax return by the due date, the filing the final IT 941 annual reconciliation
greater of $50 per month up to a maximum of through the Gateway. Check the box for Cancel School districts and the corresponding four-digit
$500, or 5% per month up to a maximum of 50% codes can be verified using The Finder at
Withholding Account and enter the date of the
of the tax. http://www.tax.ohio.gov/finder or by contacting
last day of compensation.
the applicable county auditor.
Failure-to-Pay Penalty: The employer also must file the Ohio IT 941,
If payment of the tax is not received by the due Annual Reconciliation of Income Tax Withheld, Registration
date, 10% of the delinquent payment plus
no later than 15 days after the discontinuation of
double the applicable interest charged.
business through the Gateway. EFT filers must
file the Ohio IT 942 4 Quarter/Annualth If there is an existing employer withholding
account, a separate registration for school
Withheld but Not Remitted Penalty: Reconciliation of Income Tax Withheld through
district withholding is not required. The
If an employer withholds the tax from its the Gateway.
employees but fails to remit the amounts to the employer withholding account number is used
Department, 50% of the delinquent payment for both employer and school district
The employer must submit all W-2/1099-R
withholding taxes.
plus double the applicable interest. information through the W-2/1099 Upload
feature or the Simplified W-2 format through the
Bad-Check Fee: Gateway no later than 15 days from the last date How Much Tax to Withhold
A fee of $50 for any payment dishonored by the
of payroll.
bank. See ORC. 5747.15 Traditional Tax Base Districts:
Withhold using the same wage base & number of
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