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.