Effective January 1, 2021
(A) The City Income Tax Rate for a Brecksville Resident over 18 years of age is 2%.
(B) Brecksville’s tax is collected through the Regional Income Tax Agency (RITA), which also collects for over 340 other municipalities in Ohio.
(C) RITA is a public agency that operates under state rules and regulations, mandating strict privacy for handling tax forms and information.
(D) Wages, Salaries, Commissions, Tips, Fees, Sub Pay, Bonuses, Incentive Payments, Severance Pay, Wage Continuation Plans, Gambling and Lottery Winnings of $5,000.00 or more and Early Retirement Payments are subject to the 2% tax. Dividends, Interest, Capital Gains, Unemployment Insurance Benefits, Alimony, Retirement and Active Military Income are not taxable. (Employee Contributions to Retirement and Income Deferral Plans are not excludable.)
(E) If you work in Brecksville, your employer is required to withhold the 2% tax. They remit it to RITA, where it is recorded and then paid to Brecksville.
(F) If you are self- employed in Brecksville, the wages and or net profit distribution of that enterprise is taxable a the 2% rate. (A net profit form is required.)
(G) If you work for wages a final form must be filed by April 15 after the close of the tax year. This is required by City Ordinance.
What is Tax Credit?
(A) For tax years 2015 - 2020 Brecksville residents were allowed an 87.5% tax credit for taxes paid in another taxing city. The tax credit applied to any city with a tax rate of 2% or less. If the tax rate exceeded 2% the portion above 2% was not eligible for a tax credit.
(B) Effective January 1, 2021, the new tax credit is 100% for tax years beginning on and after that date. The tax credit applies to any city with a tax rate of 2% or less. If the tax rate exceeds 2% the portion above 2% is not eligible for a tax credit.
(C) If you pay less than 2% in a taxing city other than Brecksville, the difference is reported to RITA and payable on quarterly billings (i.e., if the estimated amount owed Brecksville for the difference is over $200).
(D) If you work in a township or a city that does not have city income taxes, then the full 2% Brecksville tax is due and payable to RITA.
(E) You claim your tax credit by filing a final yearly individual RITA tax form that includes a city/state W-2 copy showing city wage and tax withheld.