Withholding Tax Worksheet 2004


As of January 1, 2004 the definition of wages subject to withholding has changed. The Ohio Revised Code Sec. 718.03
now requires all employers to withhold Municipal Income Tax on wages as defined by Sec. 3121 (a) of the Internal
Revenue Code (IRC). For most employees this is Box 5 of the W-2 and represents the “Medicare” wage.
Under this definition amounts paid under IRC Sec. 125 (“Cafeteria Plans”) are not subject to taxation.
As a reminder, all Deferred Compensation (both qualified and non-qualified) is still taxed when earned. Supplemental
Unemployment (SUB and SUCB) payments are still taxable, and the employer is responsible for the collection and
payment of this tax.
In addition, the “$150 De minimus Provision” which had previously been in ORC Sec. 718.03 has been eliminated.
Please review your withholding policies and software settings to be sure they are consistent with the above changes.
Please feel free to contact our office if you have any questions.


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