Original Release: 7/6/2021
Ohio's budget bill (HB 110) has been finalized and signed by Governor DeWine. The final version of the bill did address COVID-19 related withholding rules, resulting in the following:
• The HB 197 special withholding rule (allowing employers to withhold tax for the principal place of work municipality while employees are working at home in response to the COVID-19 pandemic) has been extended to 12/31/21.
• Employers are permitted to change an employee's principal place of work and adjust withholding accordingly.
• Employees will be able to receive "work from home/days out" refunds of tax withheld for the principal place of work municipality for tax year 2021.
• Refunds for tax year 2020 were not addressed in the bill and we will continue to monitor pending litigation.
Some additional administrative items were addressed, including limiting the information a municipality may require from an employer to verify an employee's refund request under this section, and prohibiting a residence community from disallowing its residence tax credit for a resident who chooses not to seek a refund of tax withheld for the principal place of work municipality while working from home.
With respect to COVID-19 related refund requests coming for tax year 2020, the Agency has identified a total of 772 requests through June 30, 2021, totaling just under $1.7M in requested refunds. As a reminder, we are holding these requests in a suspended status until litigation is resolved. We also have these figures broken down over all of the Agency's membership and are able to provide to each of you the number of refunds pending for your municipality and the dollars requested, through June 30, 2021. We expect more refund requests to come in as taxpayers have three years to request the refunds.