Local tax question

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Topic Author
primetime
Posts: 96
Joined: Wed Oct 03, 2007 12:52 pm

Local tax question

Post by primetime » Thu Mar 26, 2020 3:23 pm

My employer located in "employer city" has been withdrawing local taxes from my paycheck and paying them to the "employer city" since my start of employment back in Aug of 2013. I’ve always worked from my home office in "home city" which is 20 min from my "employer city" and have only gone into the office in "employer city" less than 20 times per year for meetings. So each year I would only file taxes with my "home city". The tax rate of the "employer city" was higher than the tax of the "home city" in which I live in and I would always get a "home owners credit" and would always owe nothing to my "home city" at the end of the year.

Since my location of taxation has been incorrect all this time, I sent a letter to my "employer city" letting them know that all the taxes I paid to them, (less the days actually worked in the office where were all documented and calculated) needed to be paid back to me. So they worked it all out and city hall of the "employer city" sent me a check for about $5k. I have since informed my employer that they need to start taking the local taxes out of my check and applying them to my "home city". By law they are not required to do this, but they were willing to do it. So that is all squared away now. I was only able to get back local tax money paid to my "employer city" from the 2016 filing and onward, even though taxes were paid to "employer city" since 2013.

I already filed my taxes with my "home city" for 2019 and like every other year, I owe 0 since local tax was all paid to my "employer city" at the higher tax rate. For my "home city" I would just file using their online website every year.

All this time I thought that since I went into my "employer city" for meetings a few times a year and lived so close, that the way they had been doing it was all correct. All this time it was wrong, and I was paying more money in taxes than I should have all this time. If you work something less than like 25 days in the office, you don't have to pay that 'employer city" anything but since I was trying to get money back after the fact, city hall of "work city" they counted those days as taxable to them and for those days I was not reimbursed.

So what do I do now? Do I have to refile with my "home city" for 2016-2019 and pay them any taxes due, or was my "home city" already compensated by my "employer city" in some way? Not sure how local taxes work.

simas
Posts: 519
Joined: Wed Apr 04, 2007 5:50 pm

Re: Local tax question

Post by simas » Thu Mar 26, 2020 7:11 pm

primetime wrote:
Thu Mar 26, 2020 3:23 pm
My employer located in "employer city" has been withdrawing local taxes from my paycheck and paying them to the "employer city" since my start of employment back in Aug of 2013. I’ve always worked from my home office in "home city" which is 20 min from my "employer city" and have only gone into the office in "employer city" less than 20 times per year for meetings. So each year I would only file taxes with my "home city". The tax rate of the "employer city" was higher than the tax of the "home city" in which I live in and I would always get a "home owners credit" and would always owe nothing to my "home city" at the end of the year.

Since my location of taxation has been incorrect all this time, I sent a letter to my "employer city" letting them know that all the taxes I paid to them, (less the days actually worked in the office where were all documented and calculated) needed to be paid back to me. So they worked it all out and city hall of the "employer city" sent me a check for about $5k. I have since informed my employer that they need to start taking the local taxes out of my check and applying them to my "home city". By law they are not required to do this, but they were willing to do it. So that is all squared away now. I was only able to get back local tax money paid to my "employer city" from the 2016 filing and onward, even though taxes were paid to "employer city" since 2013.

I already filed my taxes with my "home city" for 2019 and like every other year, I owe 0 since local tax was all paid to my "employer city" at the higher tax rate. For my "home city" I would just file using their online website every year.

All this time I thought that since I went into my "employer city" for meetings a few times a year and lived so close, that the way they had been doing it was all correct. All this time it was wrong, and I was paying more money in taxes than I should have all this time. If you work something less than like 25 days in the office, you don't have to pay that 'employer city" anything but since I was trying to get money back after the fact, city hall of "work city" they counted those days as taxable to them and for those days I was not reimbursed.

So what do I do now? Do I have to refile with my "home city" for 2016-2019 and pay them any taxes due, or was my "home city" already compensated by my "employer city" in some way? Not sure how local taxes work.
ask your "home city" department of revenue?

User avatar
Shackleton
Posts: 415
Joined: Mon Dec 29, 2014 6:20 pm

Re: Local tax question

Post by Shackleton » Thu Mar 26, 2020 7:21 pm

This is one of many reasons I am glad I live in a state that doesn’t have local (city) taxes!!! Once, when I got a promotion at my megacorp located in a state/city with local taxes, they changed my work location to be the home office because I was the first person at my job title/level to ever be located outside the home office. My first paycheck, I looked at the withholding and said “why is xxx city taking 1.5% of my I come?!?!” It was quickly fixed. But that was my first exposure to local city taxes. And I’m glad it was my last.
“Superhuman effort isn't worth a damn unless it achieves results.” ~Ernest Shackleton

Topic Author
primetime
Posts: 96
Joined: Wed Oct 03, 2007 12:52 pm

Re: Local tax question

Post by primetime » Thu Mar 26, 2020 7:29 pm

No local taxes are nice, but in the end, the state probably has higher tax or higher costs in other areas. I found that when looking at these "relocation cost of living" calculators, they are never correct. They always don't take into account one or more items in addition to local tax such as:

Property tax
State tax
Cost of utilities
Ave cost per sq foot of home or cost of rentals
Cost to renew your auto tag
Sales tax
Cost of insurance both home and auto

the list goes on..

The southern states tend to have cheaper cost of living and places like California are obviously very costly, but comparing midwest to north east you typically have to look at many factors.

Katietsu
Posts: 3042
Joined: Sun Sep 22, 2013 1:48 am

Re: Local tax question

Post by Katietsu » Thu Mar 26, 2020 9:23 pm

My best guess is that you are required to complete a new/amended/corrected return for your home city to reflect the refund you received from the employer city. But since these are local, only your municipality would be able to answer the question.

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