| Income Tax Division |
Businesses:
Withholding Tax Information and Filing Requirements |
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This information is intended to provide a brief summary of filing requirements and does not cover all possible circumstances.
If you have any questions or need additional information, you may contact the Tax Division at (937) 296-2502 weekdays from 8:00 a.m. to 5:00 p.m.
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| Tax Rate |
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2.25%. |
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| Taxable Income |
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In accordance with Section 718 of the Ohio Revised Code, an employer is required to withhold only on “qualifying wages”, which are wages as defined in Internal Revenue Code Section 3121(a), generally the Medicare Wage Box of the Form W-2, with certain adjustments. |
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Medicare Exempt Employees - are subject to the requirements for “qualifying wages” in the Medicare Wage Box of the Form W-2 even though that box will remain blank. |
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Cafeteria Plans – IRC Section 125 wages are not included in the definition of Medicare wages nor are they included in the Medicare Wage Box. |
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401(k), 457 and Supplemental Unemployment Compensation Benefits - These items should all be included in the Medicare Wage Box and are subject to withholding requirements. |
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Nonqualified Deferred Compensation Plan - Income from nonqualified plans is included in the definition of “qualifying wages” at the time the income is deferred and is subject to withholding requirements. |
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Stock Options - Income from the exercise of stock options is included in the definition of “qualifying wages” and is subject to withholding requirements. |
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Disqualifying Disposition of an Incentive Stock Option - Employer is not required to withhold, but the income is considered “qualifying wages” and the recipient is liable for the tax.
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Remittance of Tax Withheld |
| In accordance with the City of Kettering Income Tax Code, all employers who are required to withhold Kettering tax must remit payment of the tax withheld via electronic funds transfer. Currently there are three options available by which an employer can electronically remit payment of tax withheld. |
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The Webfile Program (ACH Debit) allows an employer to log onto our secure website and initiate a request for an ACH Debit (electronic check) from their bank account to remit payment of employee withholding taxes to the City of Kettering. If you do not have web access, you may call our office and a member of our staff will initiate the transaction on your behalf using the information you provide. |
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The ACH Credit Program is designed for larger employers to remit payment of employee withholding tax by working directly with their financial institution to initiate a request for an ACH Credit payment from their bank account to be remitted to the City of Kettering. Registration for this program is required. Click here to obtain a copy of the ACH Credit Authorization Form. Upon receipt of the completed form, the Tax Division will provide you with the necessary banking and addenda record information you will need to finalize the process. |
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The Ohio Business Gateway provides a vehicle for employers already using the services of the Ohio Business Gateway (OBG) to choose to remit payment of municipal tax withheld. Additional information about the OBG may be obtained by visiting their website at www.business.ohio.gov. |
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| Exceptions to Electronic Filing Requirement |
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Courtesy withholders, who are not required to withhold Kettering tax, likewise, are not required to file via electronic funds transfer. |
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Employers who were required to withhold less than $175.00 in tax in the prior year may continue to file on paper until they exceed the minimum threshold of $175.00 in a calendar year. |
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Subject to approval by the Board of Adjudication, the Tax Manager may grant a temporary exemption of up to eighteen months from the requirement to file via electronic funds transfer if it is found that the electronic filing requirement will impose a substantial hardship upon the employer. An employer must submit a written request for such an exemption and provide the basis for a substantial hardship. |
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Annual Withholding Reconciliation (Form KW-3)
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Any Employer who has withheld Kettering Income tax during the tax year must file an Annual Withholding Reconciliation (Form KW-3) including copies of all corresponding Form(s) W-2 on or before February 28th of each year. |
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Employers filing 250 or more IRS Forms W-2 with the Social Security Administration for any year are likewise required to file their City of Kettering Annual Withholding Reconciliation and wage information electronically. Click here for the media specifications on the acceptable electronic format. |
The City of Kettering now offers the following options to efficiently complete and file your Annual Withholding Reconciliation (Form KW-3). |
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Employers who are required to file their Forms W-2 electronically or those employers that prefer to file electronically may do so on CD-ROM or 3 1/2” Diskette following the Social Security Administration’s Specifications for Filing Forms W-2 Electronically (EFW2), or using a spreadsheet program (such as Excel) that follows our proprietary comma delimited format. Click here for specifications for the electronic filing of W-2 information. |
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Employers who use the City of Kettering Webfile Program to file and pay their withholding tax via ACH Debit may now also electronically submit their Annual Withholding Reconciliation and W-2 information using the Webfile Program. Click here to go directly to the Webfile Program. |
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Employers who are not required to file their City of Kettering Annual Withholding Tax Reconciliation (Form KW-3) electronically may submit Form KW-3 and their wage information in paper format. You may complete the form online and print a copy to attach to all corresponding Form(s) W-2. Click here to obtain a copy of the City of Kettering Annual Withholding Reconciliation (Form KW-3). |
Due Dates |
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Kettering Tax Withheld must be remitted to the Tax Division on a monthly basis. Quarterly filing is subject to the approval of the Tax Manager. |
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Monthly Filers - Monthly withholding payments are due on or before the fifteenth day of the month following the end of the withholding period. |
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Quarterly Filers – Quarterly withholding payments are due on or before April 30, July 31, October 31 and January 31. |
