Individual FAQs - Specific Filing Questions - NOLs and W-2 Income
Net operating losses cannot be used to offset wages or W-2 income.
I have Federal Schedule income or loss in multiple municipalities. How should I report these on a RITA return?
The activity of each municipality (profit or loss) must be reported on Form 37, Schedule J.
Business activities must be separated by location in order to properly allocate any tax due.
I have Federal Schedule C income and Federal Schedule E net operating loss. Can I offset my Federal Schedule C income with my Federal Schedule E net operating loss?
In general, yes. Please refer to the definition of "Income" in the RITA Rules and Regulations documents found under your municipality listed at the RITA Municipalities page. For residents, also refer to Section 6 of the RITA Rules and Regulations Beginning Tax Year 2016 as listed under each municipality in the RITA Municipalities page.
I am an owner/partner in a pass-through entity that paid municipal net profit tax to a RITA municipality. How do I report this tax paid on my behalf on a RITA municipal income tax return?
Reporting requirements depend on where you live.
For tax years 2017 and forward, if you are a RITA municipality resident, report pass-through income and associated payments earned in any non-resident municipality on Form 37, Schedule P. If you are a resident of a RITA municipality and have pass-through income earned in that municipality, complete Worksheet R and report that amount on Form 37, Line 7b. For tax years prior to 2017, report the amount of pass-through income tax paid to a RITA municipality on Form 37, Page 2, Line 7b.
If you are not a RITA municipality resident, you do not need to report your pass-through income.
Beginning with Tax Year 2018, the unreimbursed employee expense (2106) deduction has been eliminated for federal income tax purposes for most employees. Do not report unreimbursed employee expenses on Form 37 for Tax Years 2018 and after unless you are a qualified performing artist, fee-basis state or local government official or an employee with impairment-related work expenses, and you have also deducted these amounts for federal purposes.
For Tax Year 2017, reduce your related W-2 wages by the allowable 2106 business expense and report this reduced amount in Section A, Column 1. Multiply your 2106 expenses by the tax rate of your workplace municipality, reduce your local/city tax withheld (from W-2) and report this calculated amount in Section A, Column 2.
NOTE: Beginning with Tax Year 2016, 2106 Business Expenses are limited to the amount deductible for federal income tax purposes. For Tax Years prior to 2016, visit the RITA Municipalities page, click on your municipality and review the Special Notes section that relates to the appropriate tax year.
I have multiple W-2s, from the same employer, showing local tax withheld to various municipalities. How do I report all of these amounts on a RITA return?
List each wage and tax withheld, to the respective municipality on separate lines of the Form 37. For most employees, the grand total of these wages should not exceed Box 5 - Medicare wages on your W-2.
You should contact your employer and request a copy.
Local taxes paid to a municipality outside the State of Ohio will receive the same credit allowed by your resident municipality for tax paid to municipalities inside the State of Ohio.
Generally, a county tax is not considered a municipal income tax and most municipalities do not allow credit for county taxes paid. Exceptions to this rule exist. For more information, visit the RITA Municipalities page, click on your municipality and review the Special Notes section that relates to the appropriate tax year.
No. School district tax is not municipal income tax.
Generally, a four digit code (such as 2509) and/or the codes SD, LSD, CSD listed in box 20 of your W-2 indicates school district tax. These amounts SHOULD NOT be reported on your RITA return.
I made payments on a joint account and now I’m filing separately (single). How do I request that the payments on the joint account be transferred to my individual account?
Fill out a Request for Allocation of Payments Form.
Both parties on the joint account will need to sign the form.