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1. Who is required to file a Sidney income tax return?

• All Sidney residents and partial-year residents ages 18 and over
• All Sidney residents ages 16 and 17 only if their tax is not completely withheld for Sidney at the rate of 1.75%
• Retired residents if they have a rental, business or other income taxable to Sidney
• Every business entity that conducts business within the City of Sidney
• Every non-resident who engages in business or other activity within the City of Sidney, including, but not limited to the rental of real or personal property. Non-residents who are employed within the City of Sidney, but whose Sidney City income tax is not fully withheld by their employer, must also file a return.

Exemption

Retired or permanently disabled individuals who have no wages, rental, business or other income taxable to Sidney may obtain exemption from filing a Sidney tax return. To receive exemption, complete a one-time Exemption Form (with a copy of page 1 of your Federal Form 1040, if applicable) and submit to our office. 

Please note that if your status changes and you again become employed or earn Sidney taxable income, you will be required to file a Sidney tax return for any full/partial year in which such income is earned. There is no age limit, according to the Ohio Revised Code, for paying municipal taxes on otherwise taxable earned income.

2. Who must file and pay estimated tax payments?

While not all-inclusive, generally you must file and pay quarterly estimated tax payments if any of the following applies to you:

• You are a Sidney resident and earn compensation outside of Sidney that was not subject to taxation by another municipality or you earned compensation in a municipality with a municipal income tax rate of less than 1.75%
• You are a Sidney resident and are self-employed (filing a Schedule C on your Federal tax return) or receive a Form 1099
• You are a not a Sidney resident but had self-employment income earned in Sidney
• You have any similar type of situation where your income is not fully withheld upon (at 1.75%) and you would have a tax balance due to Sidney

3. When are estimate payments due?

• Quarterly estimates are due on or before April 15, July 31, October 31 and January 31 for individuals (those filing using their social security number) for the tax year 2015 and earlier. 
  • For individuals with tax years beginning after December 31, 2015, quarterly estimates are due on or before April 15, June 15, September 15, and December 15.
• For businesses (those filing using their Federal ID number), quarterly estimates are due on or before April 15, June 15, September 15, and December 15. 
• Estimated payments for fiscal year businesses are due on the 15th day of the fourth, sixth, ninth and twelfth months after the beginning of their taxable year.

4. How much estimated tax am I required to pay?

To avoid being assessed an underestimation penalty, you must pay in the lesser of:

• 90% of the current tax year’s tax liability (through withholdings, estimated payments, or prior year overpayments)
• 100% of the prior year’s tax liability (through withholdings, estimated payments, or prior year overpayments). 

Contact our office for more assistance in calculating this amount.

5. Can I get help completing my Sidney tax return?

We will gladly help you prepare your return for you, and there is no charge for this service. Simply bring your tax records (e.g. Federal 1040, all W-2’s, 1099-Misc, and other Federal schedules) and this package to our office. We highly recommend having your return prepared by our staff prior to March 31. Waiting until after this date may result in long lines or extended waiting for our office staff to assist with the preparation of your return.

6. Are students exempt from Sidney income tax? Exempt from filing a return?

Being a student has no effect on your Sidney income tax liability. All those age 16 years or older are subject to Sidney income tax on their Sidney taxable income. However, if you are ages 16 or 17 and your employer has withheld 1.75% for Sidney income tax, you are exempt from filing a Sidney tax return.

7. What schedules or supporting documents must I attach to my return?

The first page of your Federal Form 1040 is required to be attached to be considered a “complete” return.

8. I have a rental property that shows a loss each year after expenses. Should I include that in my return?

Yes, anyone having a rental property located in Sidney is required to file a return and include a copy of their Schedule E or applicable schedule of income and expenses for the rental. A return is required each year even though losses may have been incurred. Also, any Sidney residents having rental properties are required to file on those properties no matter where the properties are located.

9. May I offset my self-employment losses, rental losses or other losses against my wage income?

Business/rental losses may not be used to offset salaries, wages, commissions or other compensation. If a taxpayer is engaged in two or more taxable business activities to be included in the same return, the net loss of one business activity (not reportable to another municipality) may be used to offset the profits of another for purposes of arriving at overall net profits or net operating loss. Net operating losses may be carried forward and utilized for up to five years.

10. My W-2 has differing amounts in the federal income box, the local income box and the Medicare box. Which amount should I show as taxable wages for my city income tax return?

Sidney levies its 1.75% income tax on “qualifying wages”. In terms of which box on your Form W-2 represents “qualifying wages” for Sidney income tax purposes, it is generally the larger of Box 5 or Box 18. If your W-2’s are marked “various” or “all cities” in the Local Tax Withheld Line, you should request an itemized breakdown by city from your employer(s). You must attach this to your return. If you have questions, please contact our office.

11. I live in Sidney but work in another city and have tax withheld for that city. Do I get credit for that against my Sidney tax liability?

Yes, credit is allowed for taxes paid to another city. The allowable credit is 1.75% of the amount paid to the other city.

12. When are tax returns due?

Individuals and calendar-year businesses are required to file by April 15th. Fiscal-year businesses are required to file on the 15th day of the fourth month following the end of their fiscal year.

13. What are the penalties and interest if I don't file?

• For tax years after December 31, 2015, the late filing penalty is $25 per month after the due date (or extended due date, if applicable) up to a maximum of $150.
• Failure to pay taxes when due will result in penalty and interest of 1.5% each per month, or fraction thereof, to be assessed from the original due date for returns before January 1, 2016. 
• For tax years prior to January 1, 2016, if you file your return after its due date (or extended due date, if applicable), you will be subject to a $25 late filing fee, if filed within 60 days after the due date, but if filed more than 60 days late, the fee is $50
• For tax year 2016 the interest is.42% per month, 5% per annum. 
• For tax year 2017 the interest rate is.5% per month, 6% per annum. There is also a late filing penalty. 
• For tax years after December 31, 2015 the late filing penalty is $25 per month after the due date (or extended due date, if applicable) up to a maximum of $150.