Frequently Asked Questions:
These answers cover the most basic questions; for further detail on any item refer to our Village Income Tax Ordinance.
Question: What is the income tax rate for the Village of Westfield Center?
Answer: The income tax rate for the village is one-percent (1%).
Question: Which box on the W2 should I use?
Answer: It depends. You would think it would be box 18 but some employers reduce the amount reported in box 18 by subtracting box 12 code D….this is incorrect for Westfield Center local income tax. If this is the case on your W2 use box 5.
Question: What is the due date for individual and business income tax returns for tax year 2018?
Answer: April 15, 2019
Question: What is the interest rate for 2018?
Question: What are the taxpayer’s rights and responsibilities?
Question: How does the new ordinance impact employers?
Question: Who needs to file an income tax return with the Village of Westfield Center?
Answer: Village of Westfield Center residents and resident businesses regardless of income or age (18 or older) are required to file a return or an exemption form. Part year residents must also file and may prorate their earnings. Non-resident businesses that earn income in Westfield Center are required to file. Non-residents who earn income in Westfield Center and have local taxes withheld are not required to file a return.
Question: Does the Village of Westfield Center give taxpayers credit for taxes paid in another municipality?
Answer: Yes. If a resident works in another taxing municipality the Village of Westfield Center will give credit of up to one-percent toward taxes paid to the other entity.
Question: Do I need to file a declaration?
Answer: Yes. If income taxes are not being withheld from your wages and you expect your tax liability for the tax year will be greater than $200 you need to file a declaration. Declarations are due dates are April 15, June 15, September 15 and January 15.
Question: How is deferred compensation taxed?
Answer: Deferred Compensation means income that is earned by an employee for services rendered or performed in one year but not paid to the employee until a future year. Deferred compensation is considered to be earned income and is taxable to an employee in the year of deferral.
Question: Are pensions subject to municipal income tax?
Answer: For these purposes, pension means distributions from retirement plans as reported on Federal Form 1099R, or its equivalent or successor form, in the year paid, and which are designed to provide primarily for the retirement income of employees. Pension distributions are not taxable. Contributions paid into pension plans, retirement plans, deferred compensation plans, as well as any other type of deferred compensation arrangement or income deferral arrangement or plan, are taxable in the year the income is earned and deferred.
The following items are not exempt from the tax imposed by the ordinance (this is not an exhaustive list):
- Benefits under a wage continuation plan;
- Deferred compensation of any kind, whether deferred under a retirement plan or under any other type of compensation arrangement or contract, including any qualified or nonqualified deferrals made by an employer or the employee or both; Contributions by employers to a pension, annuity, retirement or deferred compensation plan, including simplified pension plans and similar plans, are deemed to be other compensation subject to withholding
- Contributions by employees and/or employers on behalf of employees to retirement plans are not deductible by such employee. If such contributions are deducted by an employer from the earnings of an employee, such amounts are subject to withholding tax;
- If an employer pays into a retirement or deferred compensation plan on behalf of an employee in lieu of paying said amount as wages, said payments are considered additional compensation to the employee and are subject to withholding tax.
- Payments for longevity;
- Severance pay;
- Contributions to S.T.R.S and P.E.R.S. made on behalf of a public employee by a public employer (‘picked up on behalf of an employee’) are not excludable from gross income and are subject to withholding requirements.
Question: Can I deduct the net operating loss of a business from my earnings?
Answer: No. Losses from the operation of a business or profession are not deductible from employee earnings. Rental and business losses may not be used to offset wage income.