FAQs about Business/Withholdings

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FAQs: Withholding Taxes for your Employees

FAQs: Business Income Tax

What is the business tax rate in Mason?
One Percent (1%)

Who must pay the business income tax?

• Corporations
• Unincorporated businesses (i.e. sole proprietorships, rental properties, partnerships, farm income)
• Trusts and estates
• Professions derived from work done, services performed or rendered, and business or other activities conducted in the City of Mason
• Business conducted by non-residents for work done or services performed in the city

Am I required to withhold Mason municipal taxes from my employees?
Yes, if you are located within or doing business within the City of Mason and you employ one or more persons, whether as an employee, officer, director or otherwise. Each employer shall be liable for the payment of the tax required to be deducted and withheld, whether or not such tax, in fact, has been withheld. Withholding is required on all salary, wages, compensation, and profits that result from work performed in the city, and should be withheld at the time(s) such compensation is paid to the employees.

What types of income are taxable?
Net profits, as shown on the federal tax return, are subject to Mason income tax. A copy of your federal return must be included with your Mason return.

What isthe due date for filing returns?
BR - Annual Return
Calendar Year Filers: April 15
Fiscal Year Filers: Four months after the end of the fiscal year

Extensions (Form BR only)
All Filers: Must apply in writing by the due date of the return

What if I miss the due date?
A penalty and interest will be assessed on any unpaid tax liability, as shown below.

INTEREST - One- half percent (.05%) of the unpaid balance per month or any part thereof

PENALTY - The greater of twenty dollars ($20.00) or:

One percent (1%)of the unpaid balance per month or any part thereof, if payment is made 6 months or less after it is due.

Two percent (2%)of the unpaid or any part thereof, if payment is made more than 6 months but less than 12 months after it is due.

Four percent (4%) of the unpaid balance per month or any part thereof, if payment is made more than 12 months after it is due.

If I overpay my taxes, can I get a refund?
Yes. The refund amount will be figured on your Mason tax return. You may have the amount applied to your next year's estimate or, if the amount is over $1.00, you may request a refund check by filling out the appropriate entries on the tax return.

Can I get an extension of the filing deadline?
Yes, if a written request is submitted on or before the due date for filing the return. Extensions may not exceed six months or one month beyond any extension requested of or granted by the Internal Revenue Service.

Can a return be amended after it is filed?
Yes. An amended return must be filed to report additional income and to pay any additional tax due, or to claim a refund of overpaid taxes.

How are payments applied to my account?
All payments are first applied to interest charges, then penalties in the order in which they were assessed, then against past due taxes in the order in which they became due, and then against all current taxes due.

How do I obtain the appropriate Mason Tax forms?
Click here for forms or contact the Tax Office at 513.229.8535.

FAQs: Withholding Taxes for Your Employees

Am I required to withhold Mason municipal taxes from my employees?
Yes, if you are located within or doing business within the City of Mason and you employ one or more persons, whether as an employee, officer, director or otherwise. Each employer shall be liable for the payment of the tax required to be deducted and withheld, whether or not such tax, in fact, has been withheld. Withholding is required on all salary, wages, compensation, and profits that result from work performed in the city, and should be withheld at the time(s) such compensation is paid to the employees.

How often are withholding payments due?
Monthly. The Tax Commissioner may authorize quarterly payments if the monthly payments average less than $300 per month.

My employee says he is not required to file a federal return. Should I still withhold Mason taxes?
Yes. Even if an employee is not required to file a federal tax return, he must still have Mason taxes withheld.

What types of income are taxable?
An employer is required to withhold only on "qualifying wages" as defined in Internal Revenue code section 3121(a), generally the Medicare wage in box 5 of the Form W-2. Qualifying wages include:

1. Medicare Exempt Employees are subject to the requirements for "qualifying wages" in box 5 of the Form W-2 even though that box will remain blank.
2. 401(k), 457, and Supplemental Unemployment Compensation Benefits should be included in Box 5 and are subject to withholding requirements.
3. Nonqualified Deferred Compensation Plan income is included in the definition of "qualifying wages" at the time the income is deferred and is subject to withholding requirements.
4. Stock option income is included in the definition of "qualifying wages" and is subject to withholding requirements.
5. Disqualifying Disposition of an Incentive Stock Option income is not required for withholding, but it is considered "qualifying wages" and the recipient is liable for the tax.
6. Cafeteria Plans (IRC Section 125) are not included in the definition of Medicare wages and are not taxable.

What forms will I be required to file?
W-1 Employer's Withholding Tax Return statements must accompany all withholding payments. In addition, a W-3 Withholding Tax Reconciliation statement is due annually and must be accompanied by copies of the W-2 for each employee.

Can I submit my withholding forms electronically?
Yes. The City of Mason will accept CDs in lieu of paper W-2s. The CD specifications must conform to the Social Security Administration's Magnetic Media Reporting format. Virus scan the CD before submission. Be sure to label each CD with:

1. Company Name
2. Federal ID Number
3. City Account Number
4. Tax Reporting Year
5. For multiple diskettes, indicate the proper sequence (i.e. Disk 2 of 3, etc.)

What are the due dates for filing withholding?
W-1 Withholding Tax Return
Monthly Filers: On or before the 15th day of the following month
Quarterly Filers: April 15, July 15, October 15, and January 15

W-3 - Withholding Tax Reconciliation
All Filers: On or before February 28

Can I get an extension of the filing deadline?
No. Penalties will be assessed for late payments.

What if I miss the due date?
A penalty and interest will be assessed on any unpaid withholding tax, as shown below.

INTEREST- One- half percent of the unpaid balance per month or any part thereof.

PENALTY- The greater of fifty dollars or:

Two percent of the unpaid balance per month of any part thereof:
if payment is made 3 months or less after it is due

Four percent of the unpaid balance per month of any part thereof: if payment is made more than 3 months but less than 6 months after it is due

Five percent of the unpaid balance per month or any part thereof: if payment is made more than 6 months after it is due

Can I submit my withholding payments electronically?
Yes. In fact, for most employers, the withholding must be submitted to the city through the ACH Credit Electronic Filing Program. You can register for this program by completing and returning the ACH authorization form. The city also accepts electronic payment via the Ohio Business Gateway.

How do I obtain the appropriate Mason tax forms?
Click here for forms or contact the Tax Office at 513.229.8535.