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Residents

Frequently Asked Questions for Tax Years Beginning Before 1/1/16

All Akron residents must file annual city income tax returns by April 15th of each year, whether or not they have been fully withheld and/or have paid a municipal income tax to another community. Akron's income tax is also levied on the wages of all non-residents who  work in Akron.   As a result, many questions arise. Listed below is a series of topics that present the basic facts about Akron's municipal income tax.

  What is the City of Akron Income Tax rate and what type of income is taxable?

  Since January 1, 2004 Akron's tax rate has been 2.25%.  The income tax rate prior to January 1, 2004 was two percent (2%). Generally, an individual's gross income (including income which is deferred) and a business's net profits are taxable.  Click on the following link for a list of taxable  and non-taxable income.  A list is also available from our Income Tax Office.

  I read that the City of Akron has joined CCA.  Do I file my tax return with them now?

  No.  The City of Akron will continue to receive and audit its own tax returns.  The contract with CCA permits the City to gain access to the federal taxpayer matching program.  Only those taxpayers contacted by CCA should file and remit payment to CCA.  Read more about this topic.

  Is it possible to file my Akron Income Tax returns electronically or online?

  Absolutely!  Akron was the first city in the state of Ohio to have online tax filing for its residents, beginning with tax year 1999.

  I am an Akron resident and work in an area with no municipal tax or where the tax withheld is lower than Akron's 2.25%

  You must file a Form D-1 (Declaration of Estimated Income Tax) by April 30th of each year, if the estimate of tax that will not be withheld exceeds one hundred  twenty dollars ($120.00). On it you must estimate the amount of tax you will owe for the year. One-fourth of the estimate must be paid with the Form D-1. Subsequent payments are due July 31st and October 31st of the current year, and January 31st of the following year.

   [Note: This requirement is waived for the first year of eligibility.]

  Is it possible to amend my estimate during the year?

  Yes. On the back of each quarterly statement (Form AQ-1) is a form for amending your Declaration of Estimated Income Tax. Complete it and put a check mark in the box on the front of the form to indicate that the Declaration has been amended.

  Is there an age limit for individuals subject to Akron Income Tax?

    All individuals under eighteen years of age are exempt from city of Akron Income Tax and are eligible for a refund of municipal tax withheld. However, individuals are subject to the tax for the full year in which they become eighteen. There is no upper age limit.

  I am retired.  My only income is from Social Security, company pension, interest and dividends.  Am I required to file a return?

  No.  You are not required to file an income tax return with Akron, nor are you taxed by Akron on these types of income.  However, you must file a one-time exemption certificate with us so we will not send you income tax returns in future years.

  If an individual files late, is there a penalty?

  Yes.  The penalty rate is 1% per month with a minimum penalty of 5%.  Also, there is an interest assessment of 1% per month for late payments.

  Can I receive assistance in preparing my City of Akron Income Tax Return?

  Yes.  Income Tax Division personnel will assist you either by phone, mail or in person.  Our office is open Monday through Friday, 8:00 a.m. to 4:30 p.m.  Please feel free to call 330-375-2290 or visit us at the PNC Center (1 Cascade Plaza - 11th floor).  (Click here for a  downtown MAP.)    If visiting in person, please bring a copy of your Federal Tax Return and all of your W-2s and 1099s.  These will help us assist you in preparing your Akron tax return.

  Where can I find a copy of the Akron Income Tax Ordinance and Rules and Regulations?

  Both the Income Tax Ordinance and the Rules and Regulations can be viewed or printed from our website.

  GENERAL INFORMATION

  Form 2106

  We apply the same guidelines to 2106 expenses as does the federal government; i.e., expenses must be carried forward to Schedule A and then reduced by the 2% factor. We allow the remaining expense, subject to audit and approval by the Income Tax Division.

  For verification it is necessary that a copy of Schedule A also be submitted if the taxpayer is submitting a form 2106. Please note: other miscellaneous deductions shown on Schedule A are not deductible on Akron's tax return.

  S Corporations

  The municipal income tax imposed on a resident S Corporation (one with a physical presence within the corporate boundaries of Akron) is on the entity rather than the individual member.  There is also an Akron income tax levied on the distributive share of a resident owner of a non-resident, Ohio S Corporation.  This individual must complete Worksheet SE to calculate the proper taxable income figure.

   Stock Options

  The taxable portion of a stock option is the difference between the "issue price" and the "market price at exercise" when the stock option is exercised.

  Early Retirement / Separation Payouts

  Regardless of the terminology assigned to the payout (e.g. retirement incentive, separation pay, termination pay, etc.) the payout is taxable if the recipient was employed within the city of Akron at the time of retirement.  The residence of the individual at the time of the payout has no bearing on the taxability of the payout.

  Lump Sum Distributions

  Lump sum distributions made from qualified pension and profit-sharing trusts, and not made pursuant to an employee's retirement, are taxable.

  Estimated Payments

  Our regulation is similar to that of the IRS.  To avoid penalty and interest assessments for underpayment of estimated taxes, we require at least 90% of the final tax due Akron, or 100% of the prior year liability be remitted to us in four equal quarterly installments.  If 90% has   been paid in by the fourth quarter due date, but for example, was all paid within the fourth quarter, then penalty and interest will be assessed for late quarterly payments.

  Federal Schedules

  When submitting copies of Federal schedules please remember to copy both sides of schedules where appropriate.  Processing delays will occur when insufficient documentation is provided.  Be sure to include Schedules C and E when filing your Akron tax return.

  Non-Payment

  Taxpayers who file a return timely but make a late payment of the taxes due will be assessed penalty and interest up to the time the

  payment is made.  When a taxpayer can demonstrate that he is financially unable to meet his tax obligation, it may be possible to obtain a one-time payment agreement with the Income Tax Division.

  Gross Income

  Akron income tax is on gross income, yet in the past we have found instances where tax has not been withheld on certain income (e.g. deferred income and tips). If there is any question as to whether a specified source of income is taxable we suggest you presume that it is, in order to avoid probable penalty and interest assessments for non-withholding.

  Withholding

  Any taxes withheld by an employer are held in trust.  It is illegal to withhold any sum and not forward it on to the Income Tax Division as is required by City Ordinance .  Businesses must deposit withheld taxes monthly or quarterly, depending on the amount withheld.  These payments must also be made electronically, using one of the 3 EFT Debit or Credit Methods.

  Extensions

  Extension requests are no longer preapproved by the Income Tax Division.    Attach a copy of your Federal Extension Request to your Akron Income Tax Return.  Your extension will be approved as long as your tax account is not delinquent in any manner.  The extended time is 45 days after the extension date approved by the IRS.

Filing an extension with us does NOT relieve you of the responsibility for making payment, by the original due date, of the anticipated tax due.

  Independent Contractors

  Many individuals claim to be operating as independent contractors, and some employers have classified certain employees to be independent contractors.  However, in some instances we have determined that these are misclassifications.   We follow the Federal guidelines as to determining "independent contractor" status and may request that the company produce a federal determination from an SS-8 audit.

  Contractors (building trades)

  All contractors must be registered with the City's Income Tax Division before performing work in the City.  Many are also required to obtain a COR (Certificate of Registration) before building permits or licenses can be issued. (See Section 99.09 H & I of the Income Tax Ordinance.)

  1099's

  The Akron Income Tax Division requires companies to file copies of the 1099's that they issue.  (1099's for interest or dividend payments are excluded.)  1099's can be filed on diskette or CD using a simple text or Excel compatible spreadsheet format.

Taxpayers who receive 1099's for services performed in the City of Akron, or one of its JEDDs, are also required to file and report this income.

  Gambling Winnings

  Gambling winnings, including lottery winnings, are taxable to the City of Akron.  Gambling losses are not deductible against gambling winnings unless the taxpayer is deemed to be a "professional gambler," where gambling is the taxpayer's primary business activity for federal tax purposes.  Gambling losses are not deductible against any taxable income.

  Real Estate & Insurance Sales

  Agents who work in real estate or insurance, whose employer's or broker's office is located in Akron must pay Akron's income tax on all commissions earned, regardless of the location of the property sold or point-of-sale of insurance.  This applies to Akron residents and  nonresident salespersons alike, whether employees or self-employed.

   Rental Properties

  If the gross monthly rent from any real property exceeds $250.00 per month, the net income is taxable to the City of Akron.

        

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