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Common School District Withholding Questions

Am I required to withhold school district income tax?

the taxable wage base (not gross wages) and then allow for Ohio

exemptions to arrive at the amount subject to school district income

Yes, if you...

 employ any individual who is a resident of a school district that

tax withholding. You may either determine the tax from the Ohio

has enacted the school district income tax. Place of employment

school district income tax withholding tables or from the computer

formula on page 4 of this booklet.

in Ohio does not matter; nor does an out-of-state payroll ofﬁ ce

exempt the employer from withholding the taxes. Age of the em-

Must I withhold if I only have one employee affected?

ployee also does not matter. The only factor is the employee’s

Yes. If you are conducting business in Ohio and are employing one

residence in a school district that has enacted an income tax.

or more residents of affected school districts, you must withhold

No, if you...

the school district income tax, no matter how many employees are

 do not employ in Ohio anyone who is a resident of a school

affected or how little tax is withheld.

district with an income tax;

 employ any Ohioans in a reciprocity state (Michigan, Pennsylva-

Should I withhold the school district tax for the 401(k) or

nia, West Virginia, Kentucky or Indiana), and they are residents

cafeteria plan?

of an affected school district.

You should use the same taxable wage base that you use for Ohio

withholding and then, unless the employee resides in an earned

How can my employees ﬁ nd out where they reside?

income tax base school district, allow for the same Ohio exemptions

They may contact their county auditor or use The Finder at tax.

claimed on Ohio form IT 4.

ohio.gov to verify their school district of residence.

How do I show school district withholding tax on my em-

How do I register as a school district withholding agent?

ployee’s W-2?

If you have not registered as an Ohio employer, you can register

Use boxes 19 and 20 on the W-2 or use Ohio form IT 2, which has

for both Ohio and school district withholding on the Ohio Business

speciﬁ c boxes for school district withholding tax, and identify the

Gateway (OBG) or check the appropriate box on Ohio form IT 1,

school district by its four-digit number.

Application for Registration as an Ohio Withholding Agent, and send

it in. If you are already registered and have an Ohio withholding

Transmittal of wage and tax statements, Ohio form IT 3 – All

account number, call our Taxpayer Services Division at 1-888-405-

employers required to withhold must ﬁ le with the Ohio Department

4089 to activate your Ohio school district withholding account.

of Taxation by the last day of February of the succeeding calendar

year a copy of Ohio form IT 3. Employers are no longer required to

Can I include my school district tax payment with my Ohio

send us paper copies of Ohio form IT 2 or federal form W-2. Send

form IT 501?

your state W-2 information to us on magnetic media using an ap-

No. You must remit your school district tax with Ohio form SD 101.

proved electronic format. The electronic format is available on the

department’s Web site at tax.ohio.gov.

How do I ﬁ nd out what school district each employee lives

in?

I have no employees who reside in a school district with an

As an employer, you should have each employee complete Ohio

income tax and I registered in error. What do I do?

form IT 4, Employee’s Withholding Exemption Certiﬁ cate. This form

Write your explanation on the front of the Ohio form SD 101 and

will list the employee’s school district residence, and the employee

send it to the address at the top of the form. We will inactivate your

may update this form whenever there is a change of residence.

school district account. To reactivate your account, remit any school

You can obtain the form by visiting our Web site at tax.ohio.gov.

district withholding on Ohio form SD 101.

Do I ﬁ le and pay my school district withholding at the same

I no longer have any employees who reside in a school

time as my Ohio income tax withholding?

district with an income tax. How do I inactivate my school

You must use the combined Ohio and school district income tax with-

district withholding account?

holding amounts to determine your ﬁ ling frequency. If your combined

When you ﬁ le your annual reconciliation, Ohio form SD 141, write

liability exceeds $2,000 for the 12-month period ending on June 30th

on the front that you no longer have any employees who reside

of the preceding calendar year, you must remit your school district

in a school district with an income tax in effect. We will inactivate

withholding monthly. If your combined liability does not exceed $2,000

your school district withholding account. If during the year you have

for the same period, you may remit both taxes quarterly. Partial-weekly

remitted for any employees who reside in a school district with an

(EFT required) withholders remit school district tax monthly.

income tax, you must ﬁ le an Ohio form SD 141 at the end of the

year and request inactivation on the front of that form.

How do I remit my Ohio form SD 101 and payment?

Ohio form SD 101 must be ﬁ led electronically and payment made

Are there penalties for not withholding or remitting the

through OBG unless you have been approved to ﬁ le/pay by paper.

school district tax?

If an employer knows that an employee is subject to the school

If you have been approved to ﬁ le/pay by paper, send your Ohio

district tax but fails to withhold from the employee’s compensation

form SD 101 and payment to Ohio Department of Taxation, P.O.

the appropriate amount of tax, the employer is liable for penalties

Box 182388, Columbus, OH 43218-2388.

and interest. If your return is ﬁ led late, a late ﬁ ling penalty may be

My software does not allow for a second local tax. What do I

assessed, which is the greater of $50 per month up to $500, or 5%

do?

per month up to 50% of the tax due that is required to be shown on

You must withhold the school district income tax from each affected

the report. If the tax was not withheld, the penalty may be twice the

employee. You should withhold the tax manually if your software

interest charged plus 10% of the delinquent tax payment. If your

program does not allow for the school district withholding.

payment is late, you may be assessed a late payment penalty of

up to 50% of the delinquent tax payment. The statutory interest

Can I withhold a ﬂ at percentage from my employee?

rate for 2015 is 3%.

Yes, but only if the employee resides in an earned income tax

base school district. For all of the other employees, you must use

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School District Income Tax Withholding Instructions With Form It 4 - Employee'S Withholding Exemption Certificate Page 3

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