The City of Canton is increasing its tax rate from 2.0% to 2.5% effective July 1st, 2018. This notice is to inform our payroll clients and their employees as to how this will be implemented.
Effectively, this will be reported split out by money earned at each rate being shown as two different cities on your W2’s.
The effective date will be treated like a year-end paycheck. That means that income earned prior to July 1st but not paid until afterward will be taxed at the new rate. This is written into the tax code and follows normally established procedures in payroll. The ordinance citation is 182.051 of the City of Canton Ordinances.
182.051 COLLECTION AT SOURCE; WITHHOLDING FROM QUALIFYING WAGES.
(A) (1) Each employer, agent of an employer, or other payer located or doing business in the Municipality shall withhold from each employee an amount equal to the qualifying wages of the employee earned by the employee in the Municipality multiplied by the applicable rate of the Municipality’s income tax, except for qualifying wages for which withholding is not required under section 182.052 of this Chapter or division (D) or (F) of this section. An employer, agent of an employer, or other payer shall deduct and withhold the tax from qualifying wages on the date that the employer, agent, or other payer directly, indirectly, or constructively pays the qualifying wages to, or credits the qualifying wages to the benefit of, the employee.