Employer Tax Preparation Tool - Complete your tax withholding form and pay online!
Due Date for the Annual Income Tax Returns
All Franklin Income Tax Returns must be filed on or before the federal deadline, or 3 1/2 months after the fiscal year end.
Due Date – Extensions
Federal extensions must be attached to the tax return when filed. Payment of any tax liability must be made by the original due date of the return. An extension of time to file is not an extension of time to pay the tax due. A penalty and interest charge will be assessed for all payments received after the deadline. If no extension is filed, a late filing fee will apply. Extensions are not required before April, however, if you submit the extension before the April deadline, this will stop the subsequent failure to file notice we are required to mail.
Employers must file an annual Withholding Reconciliation Return, and corresponding W-2’s, with the City of Franklin Income Tax Division by the last day of February of each year. Employers may submit a listing of all the information contained in the W-2’s if copies of the W-2’s are not available.
Electronic Filing Available
Employers who are required to withhold City of Franklin Income Taxes, or who withhold Franklin tax as a courtesy, will be able to remit payments electronically beginning in 2013. The Franklin Income Tax Division has in place an ACH Credit program. All employers who currently remit employee withholding tax payments to the City of Franklin are eligible to use this program.
E-Payment Program The E-Payment program allows the employer to log on to our secure website and initiate ACH Debit to remit employee withholding taxes to the City of Franklin. Participation in this program is free. Click here to enroll.
Ohio Board of Appeals
Following an appeal to a local Board of Review, a municipal income tax appeal may now be made to either common pleas court or to the Ohio Board of Appeals. This applies to tax years beginning in 2004.
Penalty & Interest Charges for Withholding Taxes
A penalty of 50% of the liability, and the current interest rate (see chart) per month or fraction thereof is imposed for taxes withheld and remitted after the due date.
- Apportionment – The name of the formula is changed to match Ohio’s definition
- Original Cost – Property value determined based on the original cost of property not the net book value.
- Separate Books and Records – Taxpayers are required to compute apportionment based on three-factor formula unless a substitute method, in the regulations, provides an equitable result.
Qualifying Wages – Effective January 1, 2004
An employer is required to withhold only on “qualifying wages”, which are wages as defined in IRC Section 3121(a), generally the Medicare Wage in Box 5 of the Form W-2, with an exception to include exempt employees hired before April 1, 1986.
Third Party Sick Pay- Not taxable at the city level.
Cafeteria Plans – IRC Section 125 wages are not taxable. Therefore, they are not included in the definition of Medicare wages and therefore are not included in Box 5 (the Medicare Wage box) of the W-2.
Stock Options – Franklin does tax stock option income.
Nonqualified Deferred Compensation Plan – Income from nonqualified plans is included in the definition of “qualifying wages” at the time they are deferred, but income may be excluded from taxation as a local option. Distributions received after December 31, 2003 will no longer be subject to local taxation. Franklin does tax nonqualified deferred compensation income.
401K, 457 and Supplemental Unemployment Compensation Benefits – These items all should be included in Box 5 and subject to withholding requirements.
Disqualifying Disposition of an Incentive Stock Option – Employer is not required to withhold, but the income is considered “qualifying wages” and the recipient is liable for the tax. Note: An explanation of why Box 5 is not the largest wage figure on the W-2 (ex: Health Insurance benefits for greater than 2% shareholder in S Corp) will reduce inquiries from Income Tax Division.
Meals and Entertainment Expenses - Meals and entertainment expenses are deductible on the Franklin return in the same percentage allowable on the federal return.
Uniform Definition of Taxable Income for Net Profits Business (other than individuals)
Note that Partnerships and S-Corporations must file their returns as if they are C corporations. Begin with a C Corporation’s federal taxable income before net operating losses, special deductions and make the following adjustments:
- Deduct Intangible (Interest, Dividends, Royalties…) Intangible income (ORC Sec 718.01(A)(5)) includes patents, copyrights, trademarks and other investments. Does not include lottery winnings.
- Add back 5% of Intangible Income. (exclude Capital Gains and Losses from computation)
- Add back Capital losses and 1231 losses. (1231 are considered ordinary losses for IRS.)
- Deduct Capital gains.
- Add taxes on net income deducted to compute federal taxable income.
- Add distributions to investors of REIT real Estate Investment Trusts.
- Add back the Guaranteed Payments to partners and retired partners.
- Add back payment to Self Employed Retirement Plans, Health Insurance and Life Insurance payments to owners or owners-employees.
Note: Charitable contributions are no longer an add-back under this new formula.
If you need a tax form, please go to Income Tax Forms.