(a) Should it appear that any taxpayer has paid more than the amount of the tax to which the City is entitled under the provisions of this chapter, a refund or credit of the amount so overpaid shall be made, provided a proper claim for refund of such overpayment of tax has been filed by the taxpayer within three years of the due date or filing date of the tax return, whichever is later. However, the following shall apply regarding refunds of tax withheld from non-qualified deferred compensation plans (NDCP):
(1) A taxpayer may be eligible for a refund if the taxpayer has suffered a loss from a NDCP. The loss will be considered sustained only in the taxable year in which the taxpayer receives the final distribution of money and property pursuant to the NDCP. Full loss is sustained if no distribution of money and property will be made by the NDCP.
(2) A taxpayer who receives income as a result of payments from a NDCP, and that income is less than the amount of income deferred to the NDCP and upon which municipal tax was withheld, then a refund will be issued on the amount representing the difference between the deferred income that was taxed and the income received from the NDCP. If different tax rates are applied to the tax years in which there are deferrals, a weighted average of the different tax rates will be used to compute the refund amount. Refunds shall be allowed only if the loss is attributable to the bankruptcy of the employer who had established the NDCP, or the employee's failure or inability to satisfy all of the employer's terms and conditions necessary to receive the nonqualified compensation.
(b) Income tax that has been deposited with the City of East Liverpool, but should have been deposited with another municipality, is allowable by the City of East Liverpool as a refund but is subject to the three-year limitation on refunds. Income tax that should have been deposited with the City of East Liverpool, but was deposited with another municipality, shall be subject to recovery by the City of East Liverpool.
(c) Overwithholding - If more than the amount of tax required to be deducted by the Ordinance is withheld from an employee's pay, such excess may be refunded by the employer' or Administrator, depending upon the circumstances and the time when the overwithholding is determined as follows:
(1) Current employees:
A. If the overwithholding is discovered in the same month, the employer shall make the necessary adjustment directly with the employee and the amount to be reported on the Employer's Municipal Tax Withholding Statement as withheld shall be the corrected amount.
B. If the overwithholding is discovered in a subsequent month of the same calendar year, the employer may make proper adjustment with the employee. In such case, the Employer's Municipal Tax Withholding Statement for the month in which the adjustment is made shall reflect the total amount actually withheld for the month and the amount of the adjustment deducted therefrom. Also, an amended Form must be filed for the month in which the error occurred reflecting the adjustment.
C. If the overwithholding is discovered in a subsequent month of the following calendar year, the employee must make and file a request for a refund. This request is to be filed on a form prescribed by and obtainable from the Administrator.
(2) Former employees:
A. In the cases where an amount is in excess of the tax which has been withheld from an employee who is no longer employed by the employer, the Administrator shall refund the amount of such excess withholding to the employer.
B. If the error is discovered by the employee, such employee shall file a claim with the Administrator and upon verification thereof by the employer, the Administrator shall refund the amount of such excess withholding to the employee.
C. Insufficient Withholding- If Jess than the amount of tax required to be deducted is withheld from the employee and is discovered in the same year, such deficiency shall be withheld from subsequent wages. If the employee/employer relationship has terminated, or if the underwithholding is discovered in a later year and the employee/employer relationship still exists, the employer shall notify the Administrator of such deficiency and the reason therefore, and payment shall be made by the employer in conformity with Section 181.05 of these Regulations.
D. Annual Reconciliation- On or before February 28th following any calendar year in which such deductions have been made by any employer, such employer shall file with the Administrator, in the form prescribed by the Administrator, an information return for each employee from whom municipal income tax has been withheld showing the name, address, and social security number of the employee, the total amount of taxable compensation paid during the year and the amount of municipal income tax withheld for East Liverpool from each employee.
E. Reconciliation Return- In addition to such information returns and at the time the same are filed, such employer shall file with the Administrator a reconciliation form (as prescribed by the Administrator) to enable the Administrator to reconcile the sum total of taxes withheld as disclosed by the total W-2 Forms. The reconciliation form shall also reconcile to prior remittances and returns filed by the employer for such tax year with respect to taxes withheld.
F. All employers that provide any contractual service within East Liverpool City and who employ subcontractors in conjunction with that service shall provide East Liverpool the names and address of the subcontractors. The subcontractors shall be responsible for all income tax withholding requirements under East Liverpool's ordinance. (Ord. 60-2012. Passed 11-19-12.)