City of Springboro, Ohio, U.S.A.

320 West Central Avenue
Springboro, Ohio 45066
P: 937.748.4343
F: 937.748.0815

Tax Department Information

Individual Tax Returns

Springboro Tax Rate is 1.5%

 

Credit Reduction

The amount of tax credit paid to another municipality cannot exceed 1.00%. This change will affect those residents who pay income tax to another municipality with an income tax rate greater than 1.00%.

Example: Taxpayer “A” lives in Springboro and works in Dayton. “A” earned $50,000.00 and had $1,125.00 (2.25% of earned income) of Dayton tax withheld from their pay. Springboro will give a maximum credit on the $50,000.00 of $500.00 (1.00% of earned income). Since the taxpayers tax liability would be $750.00 (50,000*1.5%), minus the credit for Dayton ($500.00), this would leave the taxpayer owing $250.00.

Due Date – Annual Income Tax Returns

All Springboro Income Tax Returns must be filed on or before the 15th day of April. Below are the due dates for estimates:

  1. 1st Quarter is due April 15
  2. 2nd Quarter is due July 31
  3. 3rd Quarter is due October 31
  4. 4th Quarter is due January 31 of the next year

Due Date – Extensions

For taxable years beginning after 2003, the extended due date of the municipal income tax return shall be the last day of the month following the month to which the due date of the federal income tax return has been extended.

Taxpayers can request an extension of time in which to file their Springboro Income Tax Return by submitting a copy of their federal extension request to the Tax Department on or before the original due date of the return. Payment of any tax liability must accompany the extension request since an extension of time to file is not an extension of time to pay the tax due. A penalty and interest charge will be assessed for all payments received after April 15th. If no extension is filed, a late filing fee will apply.

Penalty and Interest Charge

A penalty of 2% and interest of 2% per month or fraction thereof is imposed on tax balances paid after the due date. The minimum failure to pay penalty shall be $50.00.

Failure to Pay Penalty for Quarterly Estimates

A penalty of 1.5% per month shall be charged for any underpayment of estimated tax except if ninety percent (90%) of the income tax liability is paid. The minimum penalty per annum shall be one hundred dollars ($100).

Taxation of Winnings

Income received from lotteries, gaming, wagering, or other schemes of chance that is greater than $4,999.99 is taxable.

Meals and Entertainment Expenses

Meals and entertainment expenses are deductible on the Springboro return in the same percentage allowable on the federal return.

Bonus Depreciation and Section 179

Both Deductions are allowable deductions as supported by the taxpayer’s federal schedules.

Employee Business Expenses

Employee Business Expenses, as defined on Federal Form 2106, may be deducted from wage income subject to city taxation. If income is allocated between cities, Form 2106 expenses should likewise be allocated, and tax credit reduced accordingly. This is the only offset allowed against employee earnings.

Ohio Board of Appeals

Following an appeal to a local Board of Review, a municipal income tax appeal may now be made to either common pleas court or to the Ohio Board of Appeals. This applies to tax years beginning in 2004.

Refunds and Statute of Limitations

If the tax is paid to a wrong municipality and the correct locality is pursuing the payment of the tax, that city must allow a nonrefundable credit for those taxes paid incorrectly, but not refundable to the taxpayer because of the statute of limitations.

Example: In 1998, Taxpayer “A” had Springboro tax of $300.00 withheld by his employer on his $20,000 salary. “A” lived in Springboro and actually worked in Dayton. Dayton’s Tax Department notifies “A” he owes $450.00. Springboro is barred from refunding the money because of the three-year statute of limitations on refunds. Dayton must allow Taxpayer “A” a credit of $300.00 for the taxes paid to Springboro in error.

Uniform Definition of Taxable Income for Net Profits

Net Profits for individuals are based upon amounts required to be reported on federal schedules C, E, or F. There is no provision in ORC Sec. 718 prohibiting the taxation of non-employee compensation (1099-MISC).

Business Tax Returns

Due Date – Annual Income Tax Returns

All Springboro Income Tax Returns must be filed on or before the 15th day of April, or 3 1/2 months after the fiscal year end.

Due Date – Extensions

For taxable years beginning after 2003, the extended due date of the municipal income tax return shall be the last day of the month following the month to which the due date of the federal income tax return has been extended.

Taxpayers can request an extension of time in which to file their Springboro Income Tax Return by submitting a copy of their federal extension request to the Tax Department on or before the original due date of the return. Payment of any tax liability must accompany the extension request since an extension of time to file is not an extension of time to pay the tax due. A penalty and interest charge will be assessed for all payments received after April 15th. If no extension is filed, a late filing fee will apply.

Electronic Filing Now Available

Due to Ordinance change, all employers who are required to withhold City of Springboro Income Taxes will be required to remit payments electronically, unless the Administrator gives exemption for cases in which such requirement would constitute a substantial hardship on the employer. The Springboro Income Tax Department has in place two ways in which employers may file and pay their withholding tax payments by EFT. They are the ACH Credit program and the E-payment program. All employers who currently remit employee withholding tax payments to the City of Springboro are eligible to use either program.
E-Payment Program The E-Payment program allows the employer to log on to our secure website and initiate ACH Debit to remit employee withholding taxes to the City of Springboro. Participation in this program is free. Click here to enroll www.municonnect.com/springboro/login.aspx.
ACH Credit Program The ACH Credit program allows the employer to schedule the date on which their withholding taxes will be deducted from their bank account. With this program, the employer must contact their bank to have them send the payment to the City of Springboro.

Ohio Board of Appeals

Following an appeal to a local Board of Review, a municipal income tax appeal may now be made to either common pleas court or to the Ohio Board of Appeals. This applies to tax years beginning in 2004.

$150 minimum withholding threshold

Minimum withholding threshold eliminated.

Penalty & Interest Charges for Withholding Taxes

A penalty of 10% and interest of 2% per month or fraction thereof is imposed for taxes withheld and remitted after the due date. The minimum failure to pay penalty shall be $200.

Allocation Formula

Apportionment – The name of the formula is changed to match Ohio’s definition.

Original Cost – Property value determined based on the original cost of property not the net book value.

Separate Books and Records – Taxpayers are required to compute apportionment based on three-factor formula unless a substitute method, in the regulations, provides an equitable result.

Qualifying Wages – Effective January 1, 2004

An employer is required to withhold only on “qualifying wages”, which are wages as defined in IRC Section 3121(a), generally the Medicare Wage in Box 5 of the Form W-2, with an exception to include exempt employees hired before April 1, 1986.

Cafeteria Plans – IRC Section 125 wages are not taxable. Therefore, they are not included in the definition of Medicare wages and therefore are not included in Box 5 (the Medicare Wage box) of the W-2.

Stock Options – Income from the exercise of stock options is included in the definition of “qualifying wages”, but income may be excluded from taxation as local option. Springboro does tax stock option income.

Nonqualified Deferred Compensation Plan – Income from nonqualified plans is included in the definition of “qualifying wages” at the time they are deferred, but income may be excluded from taxation as a local option. Distributions received after December 31, 2003 will no longer be subject to local taxation. Springboro does tax nonqualified deferred compensation income.

401K, 457 and Supplemental Unemployment Compensation Benefits – These items all should be included in Box 5 and subject to withholding requirements.

Disqualifying Disposition of an Incentive Stock Option – Employer is not required to withhold, but the income is considered “qualifying wages” and the recipient is liable for the tax.

NOTE: An explanation of why Box 5 is not the largest wage figure on the W-2 (ex: Health Insurance benefits for greater than 2% shareholder in S Corp) will reduce inquiries from the tax department.

Meals and Entertainment Expenses

Meals and entertainment expenses are deductible on the Springboro return in the same percentage allowable on the federal return.

Bonus Depreciation and Section 179

Both deductions are allowable deductions as supported by the taxpayer’s federal schedules.

Uniform Definition of Taxable Income for Net Profits

 

Business (other than individuals)

Note that Partnerships and S-Corporations must file their returns as if they are C corporations. Begin with a C Corporation’s federal taxable income before net operating losses, special deductions and make the following adjustments:

  1. Deduct Intangible (Interest, Dividends, Royalties…) Intangible income (ORC Sec 718.01(A)(5)) includes patents, copyrights, trademarks and other investments. Does not include lottery winnings.
  2. Add back 5% of Intangible Income. (exclude Capital Gains and Losses from computation)
  3. Add back Capital losses and 1231 losses. (1231 are considered ordinary losses for IRS.)
  4. Deduct Capital gains.
  5. Add taxes on net income deducted to compute federal taxable income.
  6. Add distributions to investors of REIT real Estate Investment Trusts.
  7. Add back Guaranteed Payments to partners and retired partners.
  8. Add back payment to Self Employed Retirement Plans, Health Insurance and Life Insurance payments to owners or owners-employees.

Note: Charitable contributions are no longer an add-back under this new formula.

If you have any questions or need assistance with your city taxes, please call the Springboro Tax office at 937-748-9701.

If you have any questions or need assistance on your Federal Return, you may call the IRS in Dayton at 1-800-829-1040.

If you have any questions or need assistance on your State Return you may call the State at 1-800-282-1780

IN THIS SECTION

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