Heath City Tax: 2% Rate, RITA Form 37, and Penalties

The Heath, Ohio city income tax is a flat 2% on wages, self-employment earnings, and business profits tied to the city, and every resident age 16 and older has to file a return whether they owe anything or not. Returns go to the Regional Income Tax Agency (RITA) on Form 37, and the deadline is April 15.¹²

What the 2% Applies To

The rate hits qualifying wages: salaries, hourly pay, commissions, bonuses, severance, and net profits from self-employment or a business run in the city.¹ If you were paid for working, assume it counts.

State law keeps several categories out. Interest, dividends, and other intangible income are exempt. So are Social Security, pensions, disability payments, and other retirement income. Capital gains, military pay, personal-injury compensation, and gains from involuntary conversions are also excluded. Compensation paid to anyone under 18 is exempt as well, which matters once you look at who has to file.³

Who Has to File

Every Heath resident who has reached age 16 by the end of the tax year must file a municipal return. The requirement applies even if your employer withheld the full amount, you had no taxable income, or you owe zero.⁴ A 16- or 17-year-old files a return that simply shows no tax due, because wages paid to minors under 18 aren’t taxable.³

Non-residents file if they earned money inside Heath and their employer didn’t withhold the right amount. Anyone running a business or renting out property in the city must report that income regardless of where they live. If you lived in Heath for only part of the year, you file for that portion.⁴

Credit If You Work in Another City

Live in Heath but work in another Ohio city that also has an income tax? You can claim a credit for the tax that other city withheld, but the credit is capped at 1.25% of the income taxed by that municipality, no matter how high the other city’s rate.⁵

This is where residents trip. If you work in a city with a 2% rate and your employer withholds the full 2%, you might think Heath is paid off. It isn’t. Heath credits only 1.25% of that payment, so you still owe Heath 0.75% on the same wages. The credit doesn’t apply to school district, county, state, or federal taxes either.⁵

Partial-year residents have to prorate the credit for the time they actually lived in Heath. Taxes paid to a city you had no legal obligation to pay don’t generate a credit at all.⁵

Filing on RITA Form 37

Heath returns go on RITA Form 37, the individual return used across RITA-member municipalities.² Pull together your W-2s, your federal Form 1040, and any supporting federal schedules before you start. Self-employment income means your Schedule C figures. Rental income means Schedule E.

On the form, enter total qualifying wages from your W-2s, calculate 2%, then subtract whatever your employer withheld for Heath plus any credit for tax paid to another city. The remainder is your balance due. RITA’s online e-file system is the simplest route, but you can also download a paper form and mail it. The annual deadline is April 15.²

Quarterly Estimated Payments

Ohio law requires quarterly estimated payments to Heath if you expect to owe $200 or more for the year after credits and withholding. This usually catches self-employed workers, business owners, landlords, and employees whose employer doesn’t withhold the full Heath tax.⁶

The due dates mirror the IRS schedule:

First quarter: April 15
Second quarter: June 15
Third quarter: September 15
Fourth quarter: January 15 of the following year

When a due date lands on a weekend or holiday, the deadline moves to the next business day.⁶

Penalties and Interest for Missing the Deadline

RITA charges a late filing penalty on any return that remains unfiled past the deadline, even if there’s no tax owed. Because Heath’s filing rule covers every resident 16 and up, forgetting to send in a zero-balance return is enough to trigger it.⁷

Unpaid balances accrue interest at 9% annually for the 2026 tax year.⁷ RITA sets that rate each year, so check the current figure if you’re filing for a different year. Interest runs from the original due date.

How Long Heath Can Come After Unpaid Tax

Heath generally has three years to file a civil action to collect unpaid municipal income tax, measured from the later of the return’s due date or the date you actually filed.⁸

That window extends to six years if there was fraud, if you never filed a return, or if you omitted 25% or more of the income you were required to report. Refund claims from taxpayers run on the same three-year clock, so if you overpaid, don’t sit on it.⁸

Deducting Heath Tax on Your Federal Return

The 2% you pay Heath counts as a state and local income tax for federal purposes, so you can include it in itemized deductions on Schedule A of Form 1040. Both the amount withheld from your paychecks and any estimated payments you sent during the year qualify.⁹

The combined deduction for all state and local taxes, including state income tax, property tax, and municipal tax like Heath’s, is capped at $40,000 for 2025 and rises to roughly $40,400 for 2026 under current law. Married filing separately gets about half that. The deduction is most useful if your state income and property taxes haven’t already eaten the cap.⁹

1
The City of Heath. Tax Department
2
Regional Income Tax Agency. RITA Individual Income Tax Return
3
American Legal Publishing. Codified Ordinances of Heath, OH – 183.03 Definitions
4
Heath Income Tax Bureau. Heath Income Tax Bureau Frequently Asked Questions
5
American Legal Publishing. Codified Ordinances of Heath, OH – 181.09 Credits for Tax Paid to Another City
6
Regional Income Tax Agency. Individual FAQs – Estimated Tax Payment Requirements
7
Regional Income Tax Agency. Individuals – Penalty and Interest Rates
8
Ohio Legislative Service Commission. Ohio Revised Code 718.12 – Limitations
9
Internal Revenue Service. Topic No. 503, Deductible Taxes