gotomeeting.com/join/255986456 Ohio Department of Taxation’s Casino Training Tuesday, April 24, 2012 10:30 a.m. to 12:30 p.m.
Agenda • Welcome and Introduction • Stacey Savarise, Administrator of Organizational Development • Employer Withholding & Winners Withholding • Richard Six, Assistant Administrator of Business Tax Division • Sales & Use Tax • Phyllis Shambaugh, Counsel for Sales & Use Tax Division • Keith Wilson, Assistant Administrator of Sales & Use Tax Division • Commercial Activity Tax (CAT) • Charles Willis, Assistant Administrator of Commercial Activity Tax Division
Richard Six Assistant Administrator Ohio Department of Taxation Winners & Employer Withholding
Winners Withholding – Requirements Withhold at rate of 6% on winnings reported to IRS on Form W-2G. $1,200 on slot winnings, $5,000 table games Issue receipt to winner showing taxes deducted Winner statement “default under a support order” Proposed change would send statement to ODJFS Statutory reference: R.C. 5747.063
Winners Withholding – Responsibility Casino operator is personally liable For amounts withheld and not remitted Interest / Penalty Interest for late payment – statutory rate (3% for 2012) Penalty Late filing, late payment, nonpayment Up to $1,000 per occurrence Assessed in the same manner as income tax withholding collected by an employer. Transfer/Sale: successor must withhold from purchase money: tax, interest and penalty due. Statutory reference: R.C. 5747.063 (3)(a) and (b)
Winners Withholding – Filing Monthly winners report filed electronically with Ohio Dept. of Taxation Identify winners and tax withholding Upload report through FTP : https://ohiotax.ftptoday.com Sample template Format = Excel (.csv) comma delimited Report is due by the 10th banking day of the subsequent month (May 2012 due June 14, 2012) Proposed change to 10th day of subsequent month Year-end report to reconcile – form IT-941 W-2G report at year-end
Winners Withholding – Payment Monthly payment of taxes withheld Must be paid electronically Due by the 10th banking day of the month Proposed change to 10th day of subsequent month Payment made through Ohio Business Gateway or Treasurer of State (TOS) If through TOS, need to pre-register (fax in form to TOS) If OBG, register for employer withholding account and file and pay using IT-501 File year end-report form IT-941 to reconcile account and pay any remaining tax due.
Business Filings on the Ohio Business Gateway (OBG)http://business.ohio.gov/
This is an informational page. Click next button at the bottom of page to advance.
OBG shows that the due date for a monthly return is on the 15th of the month. However, payment of the tax withheld on winners is due by the 10th banking day after the end of the month.
Employer and School District Withholding (Employee Payroll) – Requirements Withhold income tax on compensation that is earned or received in Ohio. Exception: residents of neighboring states, refer to ORC 5747.05 (A)(3) The amount of Ohio income tax to withhold is “an amount substantially equivalent to the tax reasonably estimated to be due from the employee for the taxable year…” ORC 5747.06(A) The Tax Commissioner publishes withholding tables for employers to use to determine the amount of income tax to withhold. Last revision eff. 1/1/09. Tables: tax.ohio.gov (Employer Withholding page)
Employer and School District Withholding (Employee Payroll) – Requirements Withhold on: Compensation (required): Reported on form W-2. Wages, salaries, tips, bonuses, commissions, severance pay, stock options, buyouts, back pay, etc. and other types of compensation. Pensions (voluntary): Reported on form 1099-R. Withholding is voluntary upon request of the recipient. Note: Do not withhold on payments properly reported on IRS Form 1099-MISC, such as on payments made to Independent Contractors.
Employer and School District Withholding (Employee Payroll) – Overview Steps: Register for an Ohio withholding number Canvass employees for exemptions and school district of residence Employee Exemption Certificate (Form IT 4) Withhold taxes Pay taxes File payment forms: IT 501 and SD 101 Reconciliation forms at year-end File forms: IT-941 (or IT-942) & SD 141 W-2 filing (Form IT-3)
Employer and School District Withholding (Employee Payroll) – Registration Registration: Employers must register with ODT within 15 days from the date that liability begins. An account number is assigned to the Ohio Withholding Agent after the registration has been completed. The Ohio withholding account number is reported on tax return filings and forms W-2 issued to the employees.
Employer and School District Withholding (Employee Payroll) – Personal Exemptions Canvass employees to determine: Number of Personal & Dependent Exemptions (used to determine amount of tax to withhold) School District of Residence State of Residency Applicable Forms (retain in employee’s personnel file): IT 4 (Employee Exemption Certificate) IT 4NR (Employee Resident of Neighboring State) IT-MIL SP (Military Spouse Nonresident) IT 4 MIL (Military employees only) Withholding Tables (Effective 1/1/2009)
Employer and School District Withholding (Employee Payroll) – Personal Exemptions Employee can claim one exemption each for: Self Spouse Dependents (same as IRS) Note: Make sure that employees do not claim an excessive number of personal exemptions. Report to Ohio Dept. of Taxation: More than 9 exemptions that cannot be substantiated Send us a copy of the employee’s Form IT 4 Withhold tax using zero exemptions until employee properly completes his/her Form IT 4 Source: Information Release IT 2001-01 Proper Completion of Form IT-4 (August 31, 2001)
Form IT 4 (Employee Exemption Certificate) Employer Withholding-Personal Exemptions Employees cannot claim to be exempt
Employer and School District Withholding (Employee Payroll) – Personal Exemptions Employees can use the "Finder” database to determine school district of residence.
Employer and School District Withholding (Employee Payroll) – Personal Exemptions “Finder” will display SD name and four digit number.
Employer and School District Withholding (Employee Payroll) Residents of Neighboring states (IN, KY, WV, PA and MI) Owe state income tax to his/her home state (due to reciprocal agreements) Employee completes form IT 4NR to exempt Do not withhold Ohio state income tax. Exemption does not apply to city (municipal) income tax withholding. Statutory reference: R.C. 5747.05 (A)(3)
Employer and School District Withholding (Employee Payroll) Form IT 4NR - Residents of Neighboring States
Employer and School District Withholding (Employee Payroll) Spouse of military member is not subject to withholding on wages earned in Ohio if the military member is a nonresident who is stationed in Ohio.
Employer Withholding – Website http:/tax.ohio.gov/divisions/employer_withholding/index.stm
Employer Withholding – Tax Tables Ohio Withholding Tables for pay periods:
Employer Withholding – Filing/Payment Look-Back Period: The filing/payment frequency (“filing status”) for each year is determined by way of a 12 month “look-back period,” which ends on June 30th of the preceding calendar year. For calendar year 2012, the applicable look-back period is July 2010 through June 2011. The filing status for the calendar year (2012) is determined by the combined amount of Ohio and school district tax liability during the 2010-2011 “look-back period.” A new business will default to a quarterly filing status because there was no withholding liability during the look-back period. Statutory Reference: R.C. 5747.07
Employer Withholding – Filing/Payment Partial-Weekly periods: Two periods each week: Saturday through Tuesday Wednesday through Friday A partial weekly period cannot extend from one calendar year into the next. For 2011, Dec 31st was a Saturday; resulting in a one-day period. For 2012, Dec 31st ends on a Monday; so Saturday, Sunday and Monday will constitute one period and Tuesday 1/1/2013 is a separate period.
Employer Withholding – Filing/Payment Filing Requirements: $100,000 or more accumulation rule. Payment is due by the end of the next banking day Partial-weekly (EFT) filer: Look-back period liability of $84,000 or more. Payment by EFT to Treasurer of State Payment is due within 3 banking days after the end of the partial weekly period. Tues. ---> due Fri. Fri. ---> due Wed. Reports: Quarterly IT 942 (OBG) 4th Qtr/Annual IT 942 (OBG)
Employer Withholding – Filing/Payment Monthly. Look-back period liability of more than $2,000 but less than $84,000. Return and payment are due by the 15th day following the end of each month. Quarterly. Look-back period liability of $2,000 or less. Return and payment are due by the end of the subsequent month following the end of the quarter. Reports: IT 501 (OBG or paper) Annual IT 941 (OBG or paper)
Employer Withholding – Reconciliation Reconciliation return: Form IT 941, Annual Reconciliation or Form IT 942, 4th Quarter/Annual (EFT filers only) Due: by January 31st Any refund should be requested on the applicable annual return or amended return. Annual form IT 942: make sure that you show the total withholding for the year. Form WT AR, Withholding Tax Application for Refund, should generally be used to file only for refunds of payments made or applied to an Assessment.