Income Tax Rate: 1% Deposits due 15th day of month following payroll reporting period (monthly or quarterly)
The Village of West Union has enacted a local income tax on the gross earnings of all residents of West Union and all employees who work within the Village of West Union. Effective January 1, 2008 the West Union Income Tax rate 1% (.01) is based on the gross earnings of employees before any deductions including, but not limited to, tax deferred and tax sheltered annuities, KEOGH plans, IRA deductions and any similar plans. The West Union tax rate of ½% (.005) was effective from January 1, 2002 to December 31, 2007. If a non-resident employee works both inside and outside the limits of the Village of West Union, only the portion of gross income attributable to work performed inside the Village of West Union is subject to this tax. Residents of the Village of West Union are required to pay this tax on all of their income regardless of where they earned the income. Employers located within the limits of the Village of West Union are required to withhold and remit the appropriate West Union Income Tax from their employees on a regular basis. Employers with total monthly payroll in excess of $5,000 or more must submit the West Union Tax withheld on a monthly basis. Employers with less than $5,000 in monthly payroll may submit the employee tax withheld on a monthly or quarterly basis. Employer tax forms are available from the Income Tax Bureau at the address shown on page five of this pamphlet. Information and assistance is available free of charge to employers.
Definitions
Employee - one who works for wages, salary, commission or other type of compensation in the service of an employer.
Employer - an individual, partnership, corporation, non-profit entity, governmental agency or other association that employs one or more persons on a salary, wage, commission or other compensation basis. An employer does not include a person who employs only domestic help for such person's private residence.
Filing Deadline - the last date for submitting your West Union Income Tax return and W-3 Annual Employer Reconciliation is February 28 of each year. The filing deadline for W-1 Employer Report of Taxes Withheld is fifteen (15) days following the month or quarter being reported.
Independent Agent - any person who performs duties in association with a distinct but separate business. Under West Union Tax laws, independent agents are considered as a sole proprietorship and subject to the West Union Income Tax.
Itinerant Employee (12 Day Occasional Entry Rule) - any non-resident individual or business who performs duties of employment or provides products or services for a period of less than 12 days in a calendar year. Itinerants are not subject to the West Union Income Tax.
Non-Taxable Employee Income – unemployment compensation, disability benefits, and workman compensation benefits.
Deductible Employee Expenses - expenses necessary to perform the normal duties of employment that are recognized and reported on the federal schedule 2106. In order to claim these expenses, a copy of the federal form 2106 must accompany the West Union Tax Return.
Taxable Earned Income – includes all wages, salaries, commissions or other employee compensation for services and work performed before deductions of any type.
Non-Taxable Income – any non-employee income including social security, retirement income, pensions, interest from savings, unemployment compensations and military income.
Inactive Status – any employer who reports three or more consecutive quarters of no employee wages paid that are subject to West Union Income Tax.
Employer Tax Forms
W-1 - Employer's Report of Taxes Withheld - monthly or quarterly report of West Union tax withheld from employee's wages. Employers with monthly payroll of over $5,000 per month are required to file this form monthly.
W-2 Tax & Withholding Statement – the annual employee statement indicating total earnings and taxes withheld for federal, state and local governments.
W-3 - Withholding Tax Reconciliation - annual return used to reconcile the amount of employee tax withheld with the total taxable wages paid to West Union.
Questions?...
Who has to file a W-1 Employer’s Report of Taxes Withheld? - Any employer located within the limits of the Village of West Union and any employer located outside the Village of West Union who withholds West Union Income Tax for their employees.
Our business is located inside West Union, but some of our employees work entirely outside of West Union; do we still need to withhold employee tax for West Union? - Yes, but you will only need to withhold the tax on those employees who work partially or entirely inside West Union.
What should be done if an employee regularly works inside and outside of West Union? The amount of time the employee spends working inside West Union needs to be determined and that portion of income earned while inside of West Union will be subject to the tax.
Our business is located outside of West Union, but one or more of our employees is a resident of West Union, are we required to deduct West Union tax from these employees? – Although employers located outside the limits of West Union are not required to withhold and remit the West Union employee tax, they may do so if they choose. The resident employee is still responsible for payment of any employment tax that may be due to the Village of West Union.
Our business, which is not located in West Union, only withholds taxes for our employees who live in West Union, what forms do we need to file? – If your business only withholds taxes for your employees who live in West Union, you will need to file the W-1 Employer’s Report of Taxes Withheld on a monthly or quarterly basis and a W-3 Withholding Annual Reconciliation form on an annual basis.
We only occasionally have employees who are residents of West Union do we have to file reports regularly anyway? – Under these circumstances, you can request that your business be placed on an Inactive Status. With this status, you would only need to report and remit West Union tax during quarters in which you had employees who live or work in West Union.
What are the office hours of the Income Tax Bureau? In person in Village Clerk's office located at 33 Logans Lane, Tuesdays 3:00p.m. - 6:00 p.m.
All other questions, please call and leave a message at 937-217-8855 weekdays 9:00a.m. - 4:30 p.m. Your call will be returned as soon as possible.
