HomeNews2022 Tax Season: How Remote Workers Could Get a Larger Refund

2022 Tax Season: How Remote Workers Could Get a Larger Refund

by Victoria Santiago
(Photo by Phil Barker/Future Publishing via Getty Images)

Remote workers in Ohio might be getting a larger tax refund this year due to a loophole in a COVID-19 law that was passed in 2021. In the June 2021 budget bill, the General Assembly in Ohio included a law that helped out remote workers. The law states that people owe municipal income taxes to towns or cities, but only for the time that they spent working there. For those that work from home, they wouldn’t owe income taxes. Thus, workers would be owed a refund on all local taxes that were withheld by their employer.

However, many OH cities are requiring an employer signature to authorize the larger refund. Employers will have to legally verify that their staff worked from home. The request forms for city refunds include a date log, so that staff can say which days they worked from home. For example, Canton is requiring employers to sign the legal statement. Canton officials made sure to note that time spent traveling through the city to go to or from work does not count as time working in the city.

Bigger Returns Might Negatively Impact Ohio Cities

City treasurers in OH are starting to brace themselves for higher tax returns. The income tax department for Canton, OH has released a form for remote workers to fill out. The form allows people to request a refund on local taxes, which is 2.5% for Canton. As of right now, officials aren’t sure how working from home affects city tax revenues. The law is a little worrisome for officials now. The Sun reports that officials are concerned with how bigger returns will impact city operations.

There are no concrete ideas on how this would affect cities, but there has been a study done. The Ohio Mayor’s Alliance funded the study in October 2021. The study points to exactly what officials are worried about: a loss of revenue. For bigger and mid-sized cities, the study suggests that they will lose money. For example, Akron could lose anywhere from 3% to 7% of its general fund. In terms of money, that equals anywhere from $8 million to $20 million.

Remote Workers Could Cash In Big If They Move to This State

Vermont is trying to get more remote workers to live in the state. Part of their incentive is a grant that’s worth thousands of dollars. The New Remote Worker Grant will give remote workers $7,500 if they work from home for an out-of-state company.

There are certain requirements to get the grant, of course. First of all, they have to be a full-time VT resident. Their out-of-state work from home job must be full-time and must meet the minimum living wage for the state. Currently, the living wage in VT is set at $13.39 an hour, or $26,780 a year. Since the grant is aimed towards out-of-state transplants, eligible remote workers must have also had moving costs. The grant is limited and is given out on a first-come, first-serve basis.