Frequently Asked Questions
We apply essentially the same guidelines to 2106 expenses as does the federal government. Expenses must be carried forward to Schedule A, but without regard to the 2% AGI factor. We allow the deduction of Employee Business Expenses as reportable on the taxpayer's form 2106, subject to audit and approval by the Income Tax Division.
The difference between the "issue price" and the "market price at exercise" is taxable when the stock option is exercised.
"Early retirement incentive programs" and separation payouts (termination pay, golden parachutes, etc.) are taxable if the recipient was employed within the city of Canton at the time of retirement, regardless of the employees residency status. Resident taxpayers' separation payments are considered taxable, regardless of employment location; however, credit is given for taxes lawfully imposed and paid to the city of employment, up to 2%.
Lump sum distributions made from qualified pension and profit-sharing trusts, and not made persuant to an employee's retirement, are taxable.
When submitting copies of federal schedules please remember to copy both sides of the schedules where appropriate. As an example, often we receive a copy of Schedule C and the taxpayer has copied only the front side of the schedule. This delays processing the return until the remainder of the information is available.
Taxpayers who file a return timely but do not include payment with the return will be assessed interest penalties up to the time the payment is made. If a taxpayer is financially unable to meet the tax obligation, an installment payment agreement might be allowed, at the discretion of the Income Tax Division.
Any taxes withheld by an employer are held in trust. It is illegal to withhold any sum and not subsequently forward it to the Division of Taxation as required by the Income Tax Code. Businesses must deposit withheld taxes monthly or quarterly, depending upon the amount withheld.
Unless there are unique circumstances (determined on a case-by-case basis), no extension for filing a year-end tax return or making the required year-end payment will be granted for any individual or business whose account is in a delinquent status with us. The delinquency can relate either to documents that have not been filed or to payments that have not been made.
The income tax rate is two percent (2%). Generally, qualifying wages (including most income which is deferred) and business net profits are taxable. A list of taxable and non-taxable income is available at this website.
You must file a Declaration of Estimated Income Tax by April 30th of each year, if the estimate of tax that will not be withheld exceeds one hundred dollars ($100.00) On it you must estimate the amount of tax you will owe for the year. One-fourth of the estimate must be paid with the Tax Return/Mandatory Declaration form. Subsequent payments are due July 31st and October 31st of the current year, and January 31st of the following year.
Yes. All individuals under eighteen years of age are exempt from City of Canton Income Tax and are eligible for a refund of municipal tax withheld. Senior Citizens aged 65 and older are entitled to a Canton Income Tax credit of $200, or the amount of tax due to Canton, whichever is less.
No. You are not required to file an income tax return with Canton, nor are you taxed by Canton on these types of income. However, you must file a one-time exemption certificate with us so we will not send you income tax returns in future years.
Yes, interest penalties are assessed on an unpaid balance at the rate of 3% per month. Unpaid withholdings are penalized at the rate of 6% per month.
Yes. The Income Tax Division personnel can assist you either by telephone, mail, or in person. If you visit the Tax Office please bring a copy of your Federal Income Tax Return and all W-2's and 1099's. These will help us assist you in preparing your Canton Tax Return.
Click on Ordinances on the top of this page to view the tax ordinances online.
Many individuals claim to be operating as independent contractors, and some employers have classified certain employees as independent contractors. However, we follow the federal guidelines for determining "independent contractor" status.
All contractors must be registered with the city's Income Tax Division before performing work within the city. You can obtain the appropriate registration forms from the Income Tax Department, or the Building & Code Department.
It is a requirement of the Income Tax Division that copies of 1099's (for other than interest or dividend payments) be submitted by both the payer and the recipient of a 1099.
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