Compensation in Ohio for Income Tax Purposes
- We conform to the federal definition of compensation. This includes all wages, salaries, tips, bonuses, commissions, etc. paid to an employee.
- Ohio law requires I withhold Ohio income tax on employee compensation.
Withholding and Payment Procedures in Ohio
- Because Ohio collects a state income tax, your employer will withhold money from your paycheck for that tax.
- Ohio state income tax rates range from 0% to 4.797% across six brackets.
- The brackets apply to all taxpayers.
Tax Forms and Payments
- Ohio form IT 501 is used by employers to pay Ohio tax withheld. Complete IT 501 by entering applicable amounts on lines 1 and 2. Record this for later use when completing form IT 941, the annual reconciliation. Make check payable to Ohio Treasurer of State and mail to Ohio Department of Taxation.
- Quarterly estimated Ohio income tax payments can be made electronically. If paying by check, use IT 1040ES and SD 100ES vouchers. IT 1040ES vouchers are for estimated Ohio income tax payments. Joint filers should determine combined liability and make joint estimated payments.
Most businesses under Illinois Department of Revenue jurisdiction must complete form IL 501 each month to systematically pay monthly withheld income taxes. The IL 501 helps firms quantify and submit monthly withheld income taxes.