Work From Home Tax Benefits in Cleveland Area

Do you live in the Cleveland area and work from home? If so, you should be aware of the many work from home tax benefits. Aside from potential home office deductions and other write-offs routinely claimed by the self-employed (see "Tax Reduction Strategies for the Self-Employed"), a huge benefit could depend on comparing the Municipal Income Tax Rate of the town where you live to the city or town of your employer.

Change in Ohio's Municipal Income Tax in 2021 Could Mean Big Work From Home Tax Benefits

At Ken-Mar Tax we're continuously looking for ways our tax preparation clients can pay less taxes, which is why Ken Weinberg earns an additional 72 hours of education every three years, from an IRS CE provider, to maintain the special designation of an IRS Enrolled Agent. The low-lying fruit this tax season is this change in Ohio's municipal income tax law for the tax year of 2021 that would benefit remote workers and lead to work from home tax benefits.  A Cleveland.com article, "Paid income tax for a city you didn’t work in in 2021? Here’s how to get your refund" details multiple examples of when to pursue a refund and when it won't be applicable to your work from home situation. << print version >>

Work Remote Tax Benefits if You Live in a Township

If you live in a township i.e. Chagrin Falls Township or Olmsted Township in Cuyahoga county and Amherst Township, Columbia Township, Elyria Township, Grafton Township or any of the other townships in Lorain County, unlike other municipalities, townships do not levy an income tax on residents. What this means for your work from home tax benefits is that you should be entitled a refund if your employer is not in a township and collected Municipal Income Tax in 2021.

Cleveland/Akron Area Municipal Tax Rate Table Below

In order to decide if you are eligible for the remote worker refund, look at the table below and compare the city where you live to the city where your employer is located.  For example, if your employer is in Oberlin, with a 2.5% tax rate, and you worked from your home in Amherst, with a 1.5% tax rate, you are likely entitled to 1% of your income from 2021, or $500 for a $50,000/yr job. You can download a Municipal Income Tax Rate Database Table here. Below are figures from Tax Years 2021 and 2022 for the most common municipalities we deal with. Feel free to call with any questions, or if you do not see your tax rate included.

Contact Ken Weinberg by filling out this contact us form or by calling 440-777-2207, to review your potential tax reduction strategies and tax refunds.