A. Direct accounts for individuals and small businesses (if filing under a Social Security Number)
1. Identification and filing of individual returns and small businesses (if filing under a Social Security Number):
(a) Resident individuals: All resident individuals shall, as they establish residency within the City of New Carlisle, complete an Individual Income Tax Registration form in its entirety, for the purpose of determining their tax liability, and the tax liability of persons residing within the household. An Individual Income Tax Registration form can be obtained from the New Carlisle Income Tax Division or from our website and shall be completed and returned to that office within fifteen (15) days of occupancy within the City. All resident individuals, regardless of the length of their residency within the City, shall complete registrations upon the request of the Income Tax Division and return form within fifteen (15) days. Should the resident fail to return the completed registration within the specified time, a second notice will be sent. If no response is received to the second notice, an account will be activated and all residents known to reside at that address will be required to file a City Income Tax Return, whether or not a direct liability to the City exists.
(b) Business entities: It is the duty of each business entity doing business within or for the City to identify their business with the Income Tax Division within fifteen (15) days of establishing their business, through the completion of a Business Income Tax Registration form. It is also the duty of each business to identify subcontractors working for their businesses and to submit Form 1099-MISC to the Income Tax Division for said contractors on or before the last day of February of each year.
(c) Having rental property within the City is considered doing business within the City.
(d) It shall be the responsibility of the taxpayer to inform the Income Tax Division, in writing, of any change of the taxpayer's address within fifteen (15) days of such change. The taxpayer may request that an account be inactivated by completing the Request to Close an Individual Account Affidavit form available on the Income Tax Division webpage or at the Income Tax Office.
2. Date and Requirement for Filing Direct Returns:
(a) On or before the date prescribed by ORC 718, every person and business entity subject to the City's income tax shall, except as provided in the exceptions below, make and file with the Income Tax Division an annual return on the form provided by the City or a generic City income tax form whether or not tax is due. This process is also known as mandatory filing.
(b) If the tax return is made for a fiscal year or any period less than a year, the return shall be made by the 15th day of the fourth month following the end of such fiscal year or other period.
(c) Spouses shall not be denied the ability to file a joint return.
(d) The fact that any taxpayer is not required to file a Federal tax return does not relieve them of the responsibility for filing a City tax return.
(e) Residents who are retired with no City taxable earned income, no businesses or any type of self-employment (including rental properties) and no gambling winnings are not required to file an annual City Income Tax Return. The resident must notify the Income Tax Division in writing of their change in status. On a joint tax return, both spouses must be retired to be eligible for both individuals to stop filing an annual return. The requirement to file is waived until the next tax year that the resident has City taxable earned income, a business (including rental properties) and/or gambling winnings.
(f) A service member or their spouse does not lose or acquire a residence or domicile for purposes of taxation by reason of being absent or present in any tax jurisdiction of the United States solely for military service or to be with their spouse service member in compliance with the service member's military orders if the residence or domicile is the same for the service member and their spouse. Active duty service members and their spouses residing together within the City only to comply with active duty military orders and who have continued to maintain a residence or domicile outside the City, are not required to file a City Income Tax Return if the appropriate State of Ohio form proving non-residence is submitted to the Income Tax Division annually on or before tax return due date for calendar filers. An exception to this rule is if the active duty service member or their spouse has a business located in or doing business within the City since all business income generated within the City is taxable or if the active duty service member has any type of income for services other than their active duty military pay.
(g) An employee is not relieved from liability for a tax by the failure of the employer, agent of an employer, or other payer to withhold the tax as required or by the employer's, agent's, or other payer's exemption from the requirement to withhold the tax.
3. Other information required to reconcile with Federal returns:
(a) Resident individual taxpayers who file Form 1040 or Form 1040A with the Internal Revenue Service, must include with their City return, copies of the 1040 or 1040A (if applicable to report income not included on any other Federal schedule or when deducting 2106 Expense) along with copies of the following Federal Schedules as filed with their Federal returns:
.1 All W 2 or Gambling Winning Information Forms. To receive credit for New Carlisle tax withheld the W-2's submitted must indicate the taxes withheld for New Carlisle along the City taxable gross wages. If the employee is subject to Medicare tax, a W-2 must be submitted showing Medicare taxable wages.
.2 Schedule C Profit or <Loss> from Business or Profession
.3 Form 4797 Supplemental Schedule of Gains and Losses (Recovery of Depreciation ordinary income only)
.4 Schedule E Supplemental Income Schedule
.5 Schedule F Farm Income and Expenses
.6 Form 2106 Employee Business Expenses
.7 Schedule K 1 (Form 1065) Partner's Share of Income, Credits and Deductions, etc.
.8 Form 1099-MISC Non Employee Compensation, Gambling Winnings
.9 Schedule A
(b) Non resident individual taxpayers who file Form 1040 or Form 1040A with the Internal Revenue Service, must include with their City returns, any of the above mentioned Federal schedules that apply to income earned or accrued within or from the City, whether or not that income is taxable under the Ordinance in whole or in part.
(c) Trustees of active trusts are required to file returns and pay the tax on the taxable income thereof. Federal Form 1041 (U.S. Fiduciary Income Tax Return) must be included with the City return.
.1 Partnerships:
(a) All resident partnerships will file a return. A complete Federal Form 1065 (U.S. Partnership Return of Income) must be included with the City return. Payment of any tax due will be paid by the partnership as an entity.
(b) Non resident partnerships having net profits attributable to the City, will file a return as stated above and adjusted to the requirements of the Ordinance, but shall pay the tax due as an entity.
(c) In the case of a resident individual partner or part owner of a non resident business, the partner's distributive share of net profits is reported with the individual's return via Schedule K-1.
(d) A City Income Tax Return shall not be considered as filed until it is received complete with all the above listed applicable Federal Schedules by the Income Tax Division. All incomplete returns shall be returned to the taxpayer. It shall be the responsibility of the taxpayer to file the completed return by the due date. Any payment submitted with the incomplete return will be applied to the taxpayer's account as an estimated payment.
4. City taxable Income for individuals (those filing under a Social Security Number)*
*Most common only - See ORC 718.01 for a complete list.
(a) For most individual taxpayers, City taxable wages will be shown in the Medicare wages box of the W-2.
(b) Determination of City taxable wages: Qualifying wages earned by residents or earned within the City. "Qualifying wages" means wages, as defined in Section 3121(a) of the Internal Revenue Code, without regard to any wage limitations, adjusted as follows:
Deduct the following amounts:
• Any amount included in wages if the amount constitutes compensation attributable to a plan or program described in section 125 of the Internal Revenue Code.
• Any amount included in wages if the amount constitutes payment due to a disability related to sickness or an accident paid by a party unrelated to the employer, agent of an employer, or other payer.
• Any amount included in wages that is exempt income.
• Add the following amounts:
• Any amount not included in the wages solely because the employee was employed by the employer before April 1, 1986.
• Any amount not included in wages because the amount arises from the sale, exchange, or other disposition of a stock option, exercise of a stock option, or the sale, exchange of other disposition of stock purchased under a stock option. This applies only to amounts constituting ordinary income.
• Any amount not included in the wages if the amount is an amount described in Section 401(k), 403(b), or 457 of the Internal Revenue Code. This applies only to employee contributions and employee deferrals.
• Any amount that is supplemental unemployment compensation benefits and not included in wages.
• Any amount received that is treated as self-employment income for Federal tax purposes in accordance with Section 1402(a)(8) of the Internal Revenue Code.
• Any amount not included in wages if all of the following apply:
.1 For the taxable year the amount is employee compensation that is earned outside of the United States and that either is included in the taxpayer's gross income for Federal income tax purposes or would have been included in the taxpayer's gross income for such purposes if the taxpayer did not elect to exclude the income under Section 911 of the Internal Revenue Code;
.2 For no preceding taxable year did the amount constitute as wages as defined in Section 3121(a) of the Internal Revenue Code;
.3 For no succeeding taxable year will the amount constitute wages; and
.4 For any taxable year the amount has not otherwise been added to wages pursuant to Section 718.03 of the Ohio Revised Code, as that section existed before the effective date of House Bill 5 of the 130th general assembly, March 23, 2015.
(c) Individuals sixteen (16) or seventeen (17) years of age who earn twenty-five hundred dollars ($2,500.00) or more are subject to tax and are required to file a City income tax return. Individuals eighteen (18) years of age and older are subject to tax on all earned income and are required to file a City income tax return.
(d) Lottery, sweepstakes, gambling and sports winnings, winnings from games of chance, and prizes and awards are city taxable income. If the taxpayer is a professional gambler for federal income tax purposes, the taxpayer may deduct related wagering losses and expenses to the extent authorized under the Internal Revenue Code and claimed against such winnings.
(e) Precinct election official compensation in excess of one thousand dollars ($1,000) for the taxable year is city taxable.
(f) Compensation paid for lost salaries or wages or compensation from punitive damages is city taxable.
(g) Net profit for a person who is an individual is City taxable. Net profit for an individual means the individual's net profit required to be reported on schedule C, schedule E, or schedule F reduced by any net operating loss carryforward.* If the individual does not file a Schedule C to report self-employment earnings, the Federal 1099 forms related to this income must be provided with the City return. If the individual received partnership income on a K-1, this income is taxable and must be reported on the City return but the individual will receive credit for any City income tax already paid on this income by the partnership.
(h) Current year net-profit losses (or net operating loss carryforwards from previous tax years*) cannot be used to reduce taxes due on city taxable qualifying wages.
*Please refer to the Net Operating Loss Carryforwards section for tax years 2018 forward.
5. Income exempt from city tax for individuals (those filing a tax return under a Social Security Number)*
*Most common only - See ORC 718.01 for a complete list
(a) Military pay or allowances of members of the armed forces of the United States or members of their reserve components, including the national guard of any state.
(b) Intangible income. "Intangible income" means income of any of the following types: income yield, interest, capital gains, dividends, or other income arising from the ownership, sale, exchange, or other disposition of intangible property including, but not limited to, investments, deposits, money, or credits as those terms are defined in Chapter 5701 of the Ohio Revised Code, and patents, copyrights, trademarks, tradenames, investments in real estate investment trusts, investments in regulated investment companies, and appreciation on deferred compensation. "Intangible income" does not include prizes, awards, or other income associated with lottery winnings, gambling winnings, or other similar games of chance.
(c) Social security benefits, railroad retirement benefits, pensions, retirement benefit payments, payments from annuities, and similar payments made to an employee or a beneficiary of an employee under a retirement program or plan.
(d) Disability payments received from private industry or local, state, or federal governments or from charitable, religious, or educational organizations, and the proceeds of sickness, accident or liability insurance policies.
(e) Unemployment compensation.
(f) Precinct election official compensation less than one thousand dollars ($1,000).
(g) Alimony and child support received.
(h) Compensation for personal injuries or for damages to property from insurance proceeds or otherwise, excluding compensation paid for lost salaries or wages or compensation from punitive damages.
6. 2106 (Employee Business Expense) deductions
(a) Individual employee business expenses reported on the individual's federal form 2106 that the individual deducted for federal income tax purposes for the taxable year may be deducted from the resident's City taxable income before the City tax is calculated. If the taxpayer is not a resident, the taxpayer may deduct such expenses only to the extent the expenses are related to the taxpayer's performance of personal services in the City.
(b) To allow this deduction, the taxpayer must provide the following with their City return:
• 1040 showing that Schedule A deductions were taken on the Federal return.
• Schedule A showing that the 2106 expenses were included on the schedule.
• 2106 form showing the 2106 expenses
Failure to provide this information will result in the 2106 expense deduction being disallowed until this information has been provided.
(c) Per IRS Section 67, the allowable 2106 deduction is reduced by 2% of the total City taxable income.
(d) If a taxpayer files for a credit based on 2106 expenses, the City reserves the right to contact other taxing agencies to determine if the resident taxpayer may have requested a refund of their 2106 expense from the taxing agency where they were employed or to determine if the non-resident taxpayer used their full New Carlisle credit on their resident tax return even though they received a refund from New Carlisle based on their 2106 expense.
B. Payment plans for individuals
(1) Payment plans are available for individual taxpayers (those filing under a social security number) if they show both the financial need for the payment plan and the ability to make reasonable payments. Payment plans are not available for business accounts (those filing under a Federal ID number) or withholding accounts.
(2) No payment plan will be granted for a tax year until after the due date for that tax year. For example, if a return is filed on February 15, no payment plan may be requested until after the due date (normally April 15). The taxpayer must have a copy of their New Carlisle Income Tax return available to request a payment plan since there are time periods when the return may not yet have been reviewed and/or posted by the Tax Division.
(3) A payment plan cannot be considered until the Tax Division receives a completed Hardship Payment Plan Request form. Payment plans must be signed by the taxpayer and a sign copy return to the Tax Division to be valid. Payment plans on joint accounts (even if signed by only one party) are considered in force against both parties. No third (3rd) party may sign a payment plan.
(4) The interest rate in effect for the tax year will apply to the payment plan even if the payments on the plan go beyond the tax year. For example, if the 2016 payment plan starts in November 2017, the interest rate on the entire plan will be the interest rate for tax year 2016 even if the plans payments continue into a future tax year (or years). Interest for the entire plan is applied when the plan is created. If a payment plan is paid off early in its entirety, the taxpayer may request a written review of the plan to determine if there was interest overpaid that should be credited to the account.
(5) All payment plans have payments due on or before the first (1st) of each month. Payment due dates are not negotiable. No monthly reminder notices will be sent. The taxpayer is solely responsible for making the required payments monthly payments on or before the first (1st) of each month. Failure to adhere to the terms of the payment plan will result in the account being immediately subject to legal action.
C. Extensions to File/Pay for service in or for the armed forces:
(1) ORC 718.052 contains special extension to file and pay rules for taxpayers who are members of the National Guard and Reserve and are called to active duty and taxpayers who are civilians serving as support personnel in a combat zone. If the affected taxpayer is unable to contact the Tax Division, it is requested that a family member or the person acting as the legal representative for the service member or civilian serving as support contact the Income Tax Division and notify us of the taxpayer's status to avoid non-filing legal action.