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Business Tax Information
Filing Due Date for Employee Withholding
Withholding remittance and payment must be received no later than the 15th of the month following the reporting period. SB 172 changed the quarterly withholding payment due date to the last day of the month following the end of the quarter.
Monthly and Quarterly Withholding Threshold
An employer must remit monthly if the withholding in the previous calendar year exceeded $2,399 or if the amount required to be withheld during any month of the previous calendar quarter exceeded $200.
An employer can remit quarterly if the withholding is under the threshold described for monthly filers.
Penalty and Interest Rates
The late filing penalty is $25 a month per return (capped at $150 per return) regardless of liability. The penalty is a one-time $500 fee for casino operators and lottery sales agents.
The late payment penalty on withholding is a one-time 50 percent penalty of the unpaid balance at the time the payment is due.
Late payment penalty on unpaid income tax and unpaid estimated income tax is a one-time 15% of the amount not paid.
Interest will be calculated at the July federal short-term interest rate, plus 5 percent. See the chart below for years and rates.
| Calendar Year | Monthly Interest Rate | Yearly Interest Rate |
|---|---|---|
| 2024 | 0.83% | 10% |
| 2023 | 0.58% | 7% |
| 2022 | 0.42% | 5% |
| 2021 | 0.42% | 5% |
| 2020 | 0.58% | 7% |
| 2019 | 0.58% | 7% |
| 2018 | 0.50% | 6% |
Business Withholder ACH Credit Electronic Filing
Parma Tax Department offers the ACH Credit Electronic Filing Program for withholding taxes. In order to be more efficient and business friendly, we offer electronic filing for withholding taxes.
Benefits to You
The ACH Credit Program is available 24 hours a day, seven days a week. Payments are processed conveniently and accurately via an electronic funds transfer.
Requirements
To file using the ACH Credit Program, residents should contact their banks to ensure their banks can process ACH credit transactions.
Enrollment
To register, complete and mail or fax an ACH Credit Authorization Form.
Tax Rate
Parma's tax rate is 2.5 percent.
For employers who have employees working in Parma, they or their payroll service departments must withhold 2.5% on all wages for Parma City income tax.
Tax Credit
Parma's tax credit for residents working outside of Parma is 100% credit, up to 2 percent for city taxes paid to another community.
For those employers that do a voluntary withholding of residence taxes, see Chart A for rates.
Chart A
| Work City Tax Rate (%) | Due to Parma (%) |
|---|---|
| 0 | 2.5 |
| 0.5 | 2 |
| 1 | 1.50 |
| 1.35 | 1.15 |
| 1.50 | 1 |
| 1.72 | 0.75 |
| 2 | .50 |
| 2.25 | .50 |
| 2.50 | .50 |
| 2.85 | .50 |
| 3 | .50 |
For assistance, call 440-885-8045 and ask for a tax auditor.
Who Should File
Parma has a 2.5% city income tax with 100 percent credit of the first 2 percent withheld, but it can't exceed the employment city tax rate. Every resident 18 years old or older and not retired is required to file a City of Parma annual tax return. Residents who are not sure if they should file income tax returns or if their income is city taxable, they can contact the Tax Department for assistance.
Extended Tax Hours and Due Date
The Tax Department is open Monday through Friday, 8:30 am to 4:30 pm and will also be open from 8:30 am to 6:30 pm on April 2, 4, 9, 11 and 15. The Tax Department will prepare City of Parma income tax forms for free during office hours. Between April 1 and April 15, taxpayers will only be able to drop off their annual returns. Taxpayers will need to bring the following items to the tax office:
- Pre-printed tax form, which was mailed in January
- All W-2s, 1099s, relevant schedules, etc.
- Proof of payment to other cities, if necessary
Tax returns for 2023 are due by Monday, April 15, 2024.