With a new year near, employers should be aware of several filing and withholding changes at state and local levels that take effect or continue in 2017.
In Ohio, starting with tax year 2016 forms issued in 2017, employers must include a school district's name and four-digit identification number with the school district income tax withheld on employees' Forms W-2. The information is to be listed in Box 20.
Effective Jan. 1, 2017, the county-adjusted gross income tax, the county option income tax, the county economic development income tax and other Indiana local income taxes for special projects and purposes are to be combined into a uniform local income tax with three rate components.
In Indiana, local income tax rates for residents and nonresidents are to be the same for tax years starting Jan. 1, 2017, or later, an update to Departmental Notice No. 1 said Dec. 14.
Out-of-state employers should start to withhold state and local taxes from Indiana residents who work for them in that particular state now and continuing into 2017 if certain criteria are met, Department of Revenue Information Bulletin No. 28 said. The state where the resident works must also levy a withholding tax on wages and the nonresident employer must have a business connection with Indiana. “Indiana state and local taxes should be withheld only to the extent that the employee’s Indiana liability exceeds the taxes withheld” in the employment state, said the bulletin, which was published in November.
Starting with tax year 2016 forms filed in 2017, these states have moved up the annual reconciliation date to Jan. 31: Colorado, Georgia, Idaho, Iowa, Louisiana, Maryland, Massachusetts, Oregon, Rhode Island, South Carolina and Vermont. The changes are in line with the filing Jan. 31 of electronic and paper Forms W-2, Wage and Tax Statement, with the Social Security Administration.
In Massachusetts, employers must file state copies of Forms W-2, starting with tax year 2016 forms, by Jan. 31, 2017.
In Iowa, employers with at least 50 employees must file electronic copies of Forms W-2 with the state by Jan. 31.
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