2020 Local Tax Snapshot
2020 TAX SNAPSHOT - ALABAMA
| Local Income Tax | |
|---|---|
| Agency Name and Website | Check the City/County in which the employee works to verify if there is a local tax imposed. |
| Local Tax | Based on where the employee works regardless if a resident or non-resident. |
| Local Tax Rate | May vary per city/county |
| Taxable Limits | N/A |
| Employer Tax Portion | N/A |
| How to Determine County Tax | Use the employees work address. |
| Other Requirements | N/A |
2020 TAX SNAPSHOT – CALIFORNIA
| Local Income Tax | |
|---|---|
| Agency Name and Website | Treasurer & Tax Collector City and County of San Francisco |
| Local Tax | Based on where the employee works whether resident or non-resident. |
| Local Tax Rate | 1.50% |
| Taxable Limits | N/A |
| Employer Tax Portion | San Francisco levies a Payroll Expense Tax at 0.38% for payroll expenses exceeding $320,000. |
| Other Information | For more information regarding the Payroll Expense Tax visit the agency business portal here or the county site here. |
| How to Determine County Tax | Use the employees work address. |
| Other Requirements | N/A |
2020 TAX SNAPSHOT – COLORADO
| Local Income Tax | |
|---|---|
| Agency Name and Website | City of Aurora City and County of Denver City of Glendale City of Greenwood Village City of Sheridan |
| Local Tax (Occupational Privilege Tax) | The Occupational Privilege Tax (OPT) consists of the employee occupational privilege tax and the business occupational tax. Therefore, there is an EE and ER Portion. The following cities impose an OPT on employees who work within the city: • Aurora• Denver • Glendale • Greenwood Village • Sheridan |
| Occupational Privilege Tax Rate | Aurora – $2 per month for earnings over $250 Denver - $5.75 per month for earnings over $500 Glendale - $5 per month for earnings over $750 Greenwood Village - $2 per month for earnings over $250 Sheridan - $3 per month |
| Taxable Limits | N/A |
| Employer Tax Portion | Employer’s business OPT portion for: • Aurora - $2 per month per employee • Denver – $4 per month per employee • Glendale – $5 per month per employee • Greenwood Village - $2 per month per employee • Sheridan - $3 per month per employee |
| How to Determine County Tax | Use the employees work address. |
| Other Requirements | N/A |
2020 TAX SNAPSHOT – DELAWARE
| Local Income Tax | |
|---|---|
| Agency Name and Website | City of Wilmington |
| Local Tax (City Wage Tax) | Based on where the employee works. |
| City Wage Tax Rate | 1.25% |
| Taxable Limits | N/A |
| Employer Tax Portion | Employers are required to pay a Head Tax of $15 per month for every employee in excess of 5 that is employed within the city. An abatement of the Head Tax is available for employers who employee in excess of 50 full-time employees. For more information visit agency site here. |
| Other Information | N/A |
| How to Determine County Tax | Use the employees work address. |
| Other Requirements | N/A |
2020 TAX SNAPSHOT – INDIANA
| Local Income Tax | |
|---|---|
| Agency Name and Website | Indiana Department of Revenue |
| Local Tax (County) | Employees are taxed in their county of residence as of January 1. Therefore, the Employer must not: • Update the tax record of any Indiana employee who updates their address after the 1st of the current year. Reference instructions on the Wh-4. Nonresidents: Employees residing out-of-state on Jan 1 who work in an Indiana County which imposes a tax is subjected to local tax for where they work. |
| Taxable Limits | N/A |
| Employer Tax Portion | N/A |
| How to Determine County Tax | To determine the county you can use the following links to look up the zip code: https://www.unitedstateszipcodes.org/in/ https://www.addresses.com/zip-codes-by-state/indiana |
| Other Requirements | From Wh-4 must be kept on file. |
Best Practices for Your Payroll Department:
Review our Indiana employee’s taxes as the beginning of the year to ensure they are set up correctly in your payroll system for the first pay check of the year.
2020 TAX SNAPSHOT – KENTUCKY
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| Agency Name and Website | VisitKentucky Occupational License Association (KOLA)for a complete list of cities and counties and their sites. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Local Tax (Business License and/or Occupational) | Primarily based on where employee works but there are exceptions. There are approximately 419 cities and 120 counties, that may impose an occupational license tax for work performed within the jurisdiction that the Employer is required to withhold. There are also approximately 69 school districts in Kentucky that may impose a tax for work performed in the county of residence. |
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| Local Tax Rate | Below are a few jurisdictions that you may come across in payroll processing that are required for the Employer to withhold. Boone County:
**Note – There is also a Boone County TIF Ordinance of 2% (Inclusive of Boone County Ordinance and County Mental Health Ordinance tax). Tax only applies to employees who work in Park South at Richwood Development. No gross compensation limit. Tax is calculated on gross earnings only (no pretax deductions).** Lexington – Fayette Urban County:
Louisville – Jefferson County: (Tax is collected through The Louisville Metro Revenue Commission which collects for the Louisville Metro Government and Jefferson County Board of Education )
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| Taxable Limits | Please reference each agency’s site to determine if there are taxable limits. Below are the taxable limits for the jurisdictions listed above. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Employer Tax Portion | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| How to Determine Local Tax | First determine the work address to locate both the city and county. Next, go to both city and county sites to determine if there is a local tax. When in doubt if there is a local tax, contact the agency for the city and county. Visit Kentucky Occupational License Association (KOLA) for a complete list of cities and counties and their sites. |
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| Other Requirements | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Best Practices for Your Payroll Department:
Always run and work your address changes report to ensure you are updating the employee’s tax record accurately.
2020 TAX SNAPSHOT – MARYLAND
| Local Income Tax | |
|---|---|
| Agency Name and Website | Comptroller of Maryland |
| Local Tax (County) | Based on where the employee lives. For School District tax rates click here. |
| Taxable Limits | N/A |
| Employer Tax Portion | N/A |
| How to Determine County Tax | To determine the county you can use the following links to look up the zip code: https://www.unitedstateszipcodes.org/md/ https://m.usps.com/m/ZipLookupAction |
| Other Requirements | N/A |
Best Practices for Your Payroll Department:
Always run and work your address changes report to ensure you are updating the employee’s tax record accurately.
2020 TAX SNAPSHOT – MICHIGAN
| Local Income Tax | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Agency Name and Website | Michigan Department of Treasury **Note: Michigan has links to some of the cities that impose a local tax. You may use the above link to access some of the cities or go directly to the City’s site.** |
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| Local Tax | Based on where the employee works. In Michigan, everybody pays whether they are a resident or nonresident who work in the city. However, non residents pay half the rate. Below are all the cities that impose the tax levy: |
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| Local Tax Rate | 1% for Residents and 0.5% for nonresidents
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| Taxable Limits | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Employer Tax Portion | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| How to Determine Local Tax | Use the above check list against your employees work and resident address. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Requirements | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Best Practices for Your Payroll Department:
Always run and work your address changes report to ensure you are updating the employee’s tax record accurately.
2020 TAX SNAPSHOT – MISSOURI
| Local Income Tax | |
|---|---|
| Agency Name and Website | Collector of Revenue, City of St. Louis City of Kansas City, Missouri |
| Local (Earnings) Tax | Missouri has two cities which imposes a local tax. Employers must withhold for: St. Louis: • Residents are required to pay the earnings tax regardless of where they work. • Non-residents are required to pay the earnings tax on work/services performed in the City of St. Louis. Kansas City: • Residents are required to pay the earnings tax regardless of where they work • Non-residents are required to pay the earnings tax on work/services performed in Kansas City. |
| Local Tax Rate | 1% for both Kansas City and St. Louis |
| Other Information | When registering for the local withholding accounts, both agencies refer to this as opening a Business License. |
| Taxable Limits | N/A |
| Employer Tax Portion | Employers are required to pay the St. Louis Payroll Expense Tax: • A business is located in the City of St. Louis. • A non-resident business conducts business activity in the City of St. Louis. |
| Employer Tax Rate | 0.50% (Note: Rate is only for the St. Louis Payroll Expense tax. No employer portion is required on Kansas City) |
| How to Determine Local Tax | For further assistance to determine if your business/work site is located within the taxing jurisdiction of St. Louis or Kansas City, contact the agency directly. |
| Other Requirements | N/A |
2020 TAX SNAPSHOT – NEW JERSEY
| Local Income Tax | |
|---|---|
| Agency Name and Website | City of Jersey City of Newark |
| Local Tax (City Tax) | N/A |
| City Tax Rate | N/A |
| Taxable Limits | N/A |
| Employer Tax Portion Employer Exemptions |
Employers are required to pay tax for: Jersey City - Beginning in 2018, Employers doing business within Jersey City are subjected to 1% tax on their gross payroll. City of Newark – Employers doing business within the City of Newark are subjected to the 1% tax. Jersey City – Quarterly gross payroll less than $2,500 are exempt from the tax. City of Newark – Quarterly gross payroll less than $2,500 are exempt from the tax. |
| How to Determine City Tax | Use employees work address. |
| Other Requirements | N/A |
2020 TAX SNAPSHOT – NEW YORK
| Local Income Tax | |||||||||||||||||||||||||
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| Agency Name and Website | New York Department of Taxation and Finance | ||||||||||||||||||||||||
| Local (City) Tax Local (City) Tax Rate |
Employers are required to withhold if the employee resides in: • New York County (Manhattan), Kings County (Brooklyn), Queens County, Bronx County, and Richmond County (Staten Island) Employers are also required to withhold for: • Yonkers residents regardless of where services are performed. • Yonkers non-residents for services worked in Yonkers. New York City: • Based on the Tables. • For supplemental pay, rate is 4.25% Yonkers: • Based on the Tables. • For supplemental pay for residents 1.61135% and nonresident 0.50%. • Yonkers Surcharge - Employees residing in Yonkers and certain areas of Bronxville, Scarsdale, and Tuckahoe are subjected to a Yonkers resident tax surcharge withholding which is 16.75% of the New York State tax withholding amount. |
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| Taxable Limits | N/A | ||||||||||||||||||||||||
| Employer Tax Portion (MCTM) | Employers are required to pay the New York Metropolitan Commuter Transportation Mobility Tax (MCTM) if engaging in business in the following counties:
| Employer Tax Rate (MCTM) | Payroll Expense for Calendar Quarter is: Tax Rate for the Quarter: Over $312,500, but not over $375,000 .11% Over $375,000, but not over $437,500 .23% Over $437,500 .34% | ||||||||||||||||||||||
| How to Determine Local Tax | Use: New York’s Jurisdiction/Rate Lookup by Address service. | ||||||||||||||||||||||||
| Other Requirements | N/A | ||||||||||||||||||||||||
Best Practices for Your Payroll Department:
Always run and work your address changes report to ensure you are updating the employee’s tax record accuratel
2020 TAX SNAPSHOT – OHIO
| Local Income Tax | |
|---|---|
| Agency Name and Website | Ohio Department of Taxation **Note: The above link is for school district tax since in Ohio the school district tax is remitted along with the state return.** |
| School District Tax | Based on where the employee lives. |
| School District Rates | For School District tax rates click here |
| Local Tax (Municipal) Local Tax (Municipal) Rates Other Local Tax Information |
Based on where the employee works. In Ohio, rate information may be obtained through Rita (Regional Income Tax Agency), CCA (Central Collection Agency) or by visiting the local jurisdiction’s page if the municipality is not a member of RITA or CCA. For example, the City of Columbus is not a member of RITA or CCA and has a separate Employer’s Return. Many of Ohio’s municipalities are remitted through Rita (Regional Income Tax Agency) or CCA (Central Collection Agency). Please visit each agency for the complete list. Please Note: • If your company already has a RITA or CCA tax account, you will not need to individually register for a local tax account. Depending on your process with your payroll vendor, you will only need to have the local tax added to your payroll system and set up on the employee record. In addition, you must ensure that the local tax is set up on your payroll vendor’s side for tax filing. |
| Taxable Limits | N/A |
| Employer Tax Portion | N/A |
| How to Determine School District and Local Tax | Use: The Finder’s Tax District Summary |
| Other Requirements | N/A |
Best Practices for Your Payroll Department:
Always run and work your address changes report to ensure you are updating the employee’s tax record accurately.
2020 TAX SNAPSHOT - OREGON
| Local Income Tax | |
|---|---|
| Agency Name and Website | Trimet.org LTD.org |
| Local Tax (Transit Tax) | Effective July 1, 2018, employers must withhold the statewide transit tax from wages of Oregon residents (regardless of where work is performed). |
| Local Tax Rate | .10% |
| Taxable Limits | N/A |
| Employer Tax Portion | Employers are required to pay: • Tri-Met Tax - Oregon residents regardless of where work is performed as well as non-residents working in the state within the Tri-Met District. Tax rate is 0.7737%. • Lane County Mass Transit Tax (LTD) - Oregon residents regardless of where work is performed as well as non-residents working in the state within Lane County. Tax rate is 0.75% |
| How to Determine if Tri-Met and Lane County Tax applies | To determine the Tri-Met District Boundary visit trimet.org. This is based on the zip code of the work location. To determine the LTD District Boundary visit LTD.org. This is based on the zip code of the work location. |
| Other Requirements | N/A |
2020 TAX SNAPSHOT – PENNSYLVANIA
| Withholding Tax | |
|---|---|
| Agency Name and Website | Pennsylvania Department of Community and Economic Development |
| Earned Income Tax (EIT) | Based on the greater of the rate for the Employee’s resident EIT rate against the worked in EIT rate. |
| Earned Income Tax (EIT) Rates | For EIT tax rates click here |
| Local Service Tax (LST) | Based on if the Employee’s work location is in a taxing jurisdiction that imposes the tax. |
| Local Service Tax Rates | To determine the LST rate click here |
| Taxable Limits | EIT – N/A LST: • LST capped at $52 per calendar year. • If LST is more than $10, Employers must withhold per pay period. Lump-sum withholding is prohibited. • If LST is $10 or less, Employers may withhold all at once from the first pay of the year. • For information regarding exemption for LST, visit agency site. |
| Employer Tax Portion | N/A |
| How to Determine EIT and LST Local Tax | Use: http://munstats.pa.gov/Public/FindLocalTax.aspx |
| Other Requirements | Employers must have a PA Residency Certification Form on file for each new hire as well as obtain a new form when an employee updates their address. |
Pennsylvania’s Act 32 made simple:
- A Law passed in 2012, which streamlined and standardize the Earned Income Tax Collection System; hence reducing the number of tax collectors in Pennsylvania.
- Every Employer who has individuals at work sites or work from their homes in the state are required to withhold all applicable local taxes and remit to the appropriate tax officer.
- Exception: Philadelphia is not regulated by Act 32 and payments must be remitted to the Department of Revenue.
What are PSD codes and why are they so important:
- PSD stands for “political subdivisions.” This six-digit number identifies each Pennsylvania municipality. It also tells the Employers and Tax Agents where to remit and distribute the correct amount of local earned income tax to the appropriate taxing jurisdictions;
- This is why the PA Residency Certification Form is so important when Employers have a new hire or when an employee has an address change.
Best Practices for Your Payroll Department:
- Berkheimer Tax Innovations offers a free service for employers to validate PSD codes and tax rates. The PSD Confirmation Service can be accessed by clicking here.
- Depending on your company or organization, you may want to utilize this service either on a monthly or quarterly basis. This confirmation service will ensure what your employees submitted to you on the PA Certificate of Residency is accurate.
- Lastly, always run and work your address changes report to ensure you are updating the employee’s tax record and obtaining the PA Residency Certification form to have on file for any employees who may have moved in PA.