I’m updating this post with a photo, but also to say that I have seen very little of this issue, and I have heard even less from the taxing agencies and my professional organizations. So I am pretty sure this is now something we are going to ignore until summer.
Also, just in case you don’t care about local taxes but are wondering if there is some sort of deduction this year for employees who have home offices now, the answer is “No.” Sorry.
Ok, bear with me here.
Let’s say that in the before times you worked for the Nationwide and your office was officially in Columbus. But you didn’t actually work at that Columbus office, for whatever reason you worked from home, and your home was in Clinton Township. Columbus has an income tax rate of 2.5% and your employer would have withheld that from your paycheck. But since you weren’t actually working in Columbus, your were actually physically working in a non-taxing township, you would have been eligible for a refund of all that tax withheld.
Now we are in the pandemic and many, many people are working from home. So what if you were supposed to be working in Columbus, but you were required to work from home, and your home is in a township, or Dublin (2% tax rate) or Powell (0.75% tax rate)? Shouldn’t you be able to get a refund on the difference there?
And what about the reverse, which no one is asking. What if you worked in Dublin, but are now working from home in Columbus. Will you have to file and pay the difference to Columbus?
As soon as work from home became the norm I started worrying about this. And I had a lot of company, since all our tightly knit municipalities starting worrying about how this was going to affect their budgets, already strained by Covid-19. So they passed a law that essentially says that if you are working from home due to stay-at-home orders you are not able to claim a refund on your local tax.
And somebody immediately filed a lawsuit, which is still pending and we have no idea when it is going to be resolved.
So if you fit into this category we can talk about what we need to do. Right now RITA is recommending that the returns claiming the refunds be filed, but RITA will not issue any refunds until the issue is settled in court.
Just one more thing about which we need to be patient.