Ohio Supreme Court to Hear Case Involving Municipal Income Tax Refunds for 2020

As we previously reported here, Ohio passed legislation allowing refund claims for 2021 to employees that worked from home but paid municipal income tax to a jurisdiction associated with their employer’s office (often at a higher rate). However, refunds for 2020 have been on hold due to pending litigation.

The Supreme Court of Ohio has accepted a case addressing the 2020 tax year. In the midst of the COVID-19 pandemic, Ohio passed a rule that work done from home by an employee was deemed work performed at the employer’s location for municipal income tax purposes. Ohio’s rule was challenged by taxpayers in several jurisdictions. The Supreme Court’s decision in this case is expected to resolve the issues surrounding tax year 2020 and clarify whether refunds will be permitted.

If you have questions on Ohio municipal income taxes or other SALT matters, please contact the HBK SALT Advisory Group at hbksalt@hbkcpa.com.

About the Author(s)

Matt Dodge is a Senior Manager, State and Local Tax, HBK CPAs & Consultants. He has more than 20 years of experience in state and local tax (SALT) with a focus on sales and use tax. He has served clients in various industries, including construction, manufacturing, oil and gas, retail, service providers, and transportation. He can be reached by email at mdodge@hbkcpa.com.

Hill, Barth & King LLC has prepared this material for informational purposes only. Any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or under any state or local tax law or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Please do not hesitate to contact us if you have any questions regarding the matter.