If you live or work in Ohio, you should be familiar with RITA, or the Regional Income Tax Agency. It sometimes surprises newcomers to the state. You may or may not see a deduction for RITA in your paychecks. And, whether you need to pay these taxes depends on where you live in Ohio. You may have RITA withheld but not owe; you may own and not have it withheld. Confused? Read on to understand the basics of RITA taxes in Ohio to make sure you’re paying what you need to and avoiding penalties.
How Does RITA Work?
The Regional Income Tax Agency collects income taxes for many Ohio municipalities, which the agency lists here. Each of those municipalities sets the regional income tax. This tax goes by different names, depending on whether you’re a resident, a business owner, or an individual who works in one of them.
If your city or municipality collects the tax, they then use it for services. These might include trash and sewer services, snow clearing, emergency or other services. Check the website of the city or township where you live to learn how they use regional tax revenue.
The tax you pay to the municipality where you work is called “workplace tax.” The tax you owe to the municipality where you live is called “residence tax.” Employers usually withhold the workplace tax automatically. Talk to your company’s payroll department to learn what they withhold. You may have the option to adjust their withholding.
If RITA taxes are not withheld from your paycheck, you pay quarterly, directly to RITA. You can visit RITA’s website to estimate what you will owe for the tax year and to make payments.
Who Has to File RITA Taxes in Ohio?
TurboTax explains that sometimes, there are situations where people don’t need to file a tax return. This is usually if individuals haven’t made enough money to cover the standard deduction plus one exemption, and they aren’t dependent on someone else.
But, for Ohio residents, that’s not the case. If you live in a municipality that participates in the tax agency, you must file, regardless of whether you owe. Anyone over 18 who has earned money in a RITA municipality, or who conducts business there must file.
How to Pay RITA Taxes
If you believe you’ll have to pay more than $200 in income taxes for a calendar year, you’re required to pay estimated quarterly taxes.
The organization urges residents to use the My Account portal to pay quarterly taxes. If you don’t use the portal, there is a form that you can fill out and mail in.
Paying your income taxes is never a fun activity, but if you keep up with quarterly estimated taxes, there’s less chance of a nasty surprise on the annual tax filing deadline. If you’re looking for a financial professional to help you sort it all out, we’re here. Just reach out to DCA Certified Public Accountants, and we can help!