You have to pay RITA tax in Ohio if you live in, work in, or run a business in one of the 360-plus Ohio municipalities that use the Regional Income Tax Agency to collect their local income tax. RITA itself does not impose any tax. It administers and collects municipal income taxes on behalf of its member cities and villages, each of which sets its own rate (ranging from 0.5% to 3%) and its own rules under its own ordinance.1Regional Income Tax Agency. About RITA2Regional Council of Governments – Regional Income Tax Agency. Municipal Income Tax Facts Whether you owe comes down to your connection to one of those municipalities.
If You Live in a RITA Municipality
Residency is the broadest trigger. If your home address sits inside a RITA member municipality, you owe that municipality’s income tax on virtually all of your earned income, no matter where you earned it. A resident of a municipality with a 2% rate pays 2% on wages from a job across town or across the state.
The filing obligation starts at age 18 and runs every year, even if your total tax due is zero.3Regional Income Tax Agency. Individual FAQs – Filing – Filing Requirements A return is still required when your employer has already withheld the full amount, when all your income is exempt, and when you had no income at all. Skipping the return because you don’t owe anything is one of the most common ways RITA residents trip the system.
Part-Year Residents
If you moved into or out of a RITA municipality during the year, you only owe that municipality’s tax on income earned while you lived there. You allocate your W-2 wages and any non-wage income between the periods before and after the move, and you note the effective dates on your return. If you moved between two RITA municipalities, you may need to file returns for both and show how you split the income.4RITA (Regional Income Tax Agency). Instructions for Form 37
If You Work in a RITA Municipality but Live Somewhere Else
You don’t have to live in a municipality to owe its income tax. If you work inside a RITA municipality’s borders, that municipality taxes the income you earn there. This workplace tax is the most common way non-residents get pulled in.5Regional Income Tax Agency. Business FAQs – Employer Withholding – Workplace vs. Residence Your employer usually handles it through payroll withholding, in which case you may not need to do anything else. If your employer did not fully withhold, or if you earned non-wage income within the municipality, you must file a return yourself.6Regional Income Tax Agency. Individuals – Do I Need To File?
Living in one municipality and working in another can mean two tax bills. The workplace city has first claim. Your home city may then grant a credit against its resident tax for amounts paid to the workplace city, but under Ohio Revised Code 718.04 that credit is optional, and each municipality decides whether to offer one and how much.7Regional Income Tax Agency. Municipal Income Tax Facts RITA’s tax rates table lists each municipality’s rate alongside its credit limit.8Regional Income Tax Agency. Tax Rates Table
The 20-Day Rule for Occasional Workers
Ohio law gives occasional workers a practical shield. An employer isn’t required to withhold municipal income tax for an employee who works in a particular municipality on 20 or fewer days during the calendar year.9Ohio Legislative Service Commission. Ohio Revised Code 718.011 Once you exceed 20 days there, the employer must begin withholding for every workday in that city for the rest of the year.
A few situations override the threshold:
- If the municipality is your principal place of work, the exemption doesn’t apply at all.
- On construction and temporary worksites expected to last more than 20 days, withholding starts from day one.
- Professional athletes and entertainers are subject to withholding from the first day.
The 20-day rule governs the employer’s withholding obligation. Technically, a non-resident’s underlying tax liability on income earned in the municipality still exists under Ohio Revised Code 718.01, but most municipalities do not pursue individuals whose employers had no obligation to withhold.10Ohio Legislative Service Commission. Ohio Revised Code 718.01
Remote Workers
Ohio updated its rules for remote work after the pandemic-era temporary measures expired. Under Ohio Revised Code 718.021, effective October 2023, employers can elect to treat a remote employee’s income as earned at the employee’s assigned “qualifying reporting location” rather than at the employee’s home. If your employer makes that election, your workplace tax goes to the city where your assigned office sits, not the city where you actually work. If no reporting location exists in Ohio, the statute provides a fallback hierarchy based on a supervisor’s location or the employer’s principal place of business.11Ohio Legislative Service Commission. Ohio Revised Code 718.021
In practice: if you work from home in one RITA municipality while your employer reports your wages at an office in a different municipality, the office city gets the workplace tax. Your home municipality can still tax you as a resident, and whether you get credit for the workplace tax depends on your home city’s ordinance. If you’re not sure how your employer is handling it, ask payroll.
If You Run a Business or Have Self-Employment Income
Any business that operates, keeps an office, or earns net profit within a RITA municipality owes that municipality’s income tax on those profits. This covers sole proprietorships, partnerships, S corporations, and C corporations.12Regional Income Tax Agency. Welcome New Businesses Sole proprietors report net profit on Schedule J of Form 37, using figures from federal Schedule C.13Regional Income Tax Agency. Business FAQs – Net Profit – Federal Schedule C Partnerships calculate municipal taxable net profit as if they were C corporations under Ohio Revised Code 718.01.14Regional Income Tax Agency. Business FAQs – Net Profit
Businesses also carry a withholding duty. If you have employees working in a RITA municipality, you must register with RITA, withhold municipal income tax from their wages, and remit it. Registration can be done online or by submitting paper Form 48, and each business account is identified by its Federal Employer Identification Number.15Regional Income Tax Agency. Business FAQs – General
Rental income has its own threshold. Net rental income from property in a RITA municipality is taxable if your gross monthly rents from all properties in that municipality exceed $250. Below that amount, the municipality doesn’t treat the activity as a business.16Regional Income Tax Agency (RITA). Instructions for Form 37 Gambling and lottery winnings are also taxable under Ohio Revised Code 718.01.10Ohio Legislative Service Commission. Ohio Revised Code 718.01
Who Does Not Have to Pay
Workers Under 18
If you’re under 18, your income is generally not subject to municipal income tax and you don’t need to file a RITA return.6Regional Income Tax Agency. Individuals – Do I Need To File? Some municipalities set their own age rules, so check the special notes for yours on the RITA site. If an employer withheld municipal tax from a minor’s paycheck in error and the amount exceeds $10, the money can be recovered by filing Form 10A.17Regional Income Tax Agency. Refunds
Military Servicemembers
Active-duty pay, reserve pay, and National Guard pay are all exempt from Ohio municipal income tax.18Regional Income Tax Agency. Individual FAQs – Taxable / Nontaxable Income – Non-Taxable Income If military pay was your only income for the year, you still file an annual exemption statement with RITA rather than skipping the filing requirement. When your situation changes and you start receiving other taxable income, you resume filing Form 37.
Nonprofit Organizations
Organizations recognized as tax-exempt under IRC Section 501(c) don’t need to file an annual net profit return with RITA, as long as the IRS determination letter is on file with RITA. Any unrelated business income the nonprofit earns, however, is still subject to municipal income tax and must be reported.19RITA (Regional Income Tax Agency). 2025 Net Profit Income Tax Form 27 Instruction Booklet
Income the Local Tax Does Not Reach
Even if you’re a resident who has to file, several categories of income fall outside the municipal tax base. Ohio Revised Code 718.01 excludes most passive and retirement income by defining “intangible income” broadly and separately exempting several benefit types. The following are not subject to municipal income tax:
- Interest and dividends
- Capital gains and other income from selling investments
- Social Security benefits
- Pensions and retirement distributions
- Unemployment compensation
- Workers’ compensation
- Military pay (active duty, reserves, and National Guard)
A retiree whose only income is Social Security and pension payments owes no RITA tax on that income, though a resident may still have an annual filing obligation.16Regional Income Tax Agency (RITA). Instructions for Form 37
Check Whether Your City Actually Uses RITA
Not every Ohio city and village is a RITA member. Some use the Central Collection Agency (CCA), and others collect their local income tax in-house. If your municipality uses one of those other systems, you don’t file with RITA at all, even though you still owe a local income tax. RITA publishes a full member list on its Municipalities page, with each member’s tax rate, credit limit, and any special notes.20Regional Income Tax Agency. RITA Municipalities If your city isn’t on it, contact your city’s tax department directly to find out which agency handles your return.