The employee’s withholding exemption certificate IT-4-OH is essential to onboarding new employees in Ohio and maintaining them as employees over time.
The form lets you know how much withholding you should make from an employee’s paycheck for Ohio state income taxes and the worker’s local school board income tax if it applies to them. For employees, it’s important that they keep their IT-4-OH up to date so that the proper amount is being withheld and they don’t get hit with any fines or penalties at the end of the year.
In this post, we’ll take a closer look at what an employee’s withholding exemption certificate IT-4-OH is, how to fill it out, and why employees should always keep it updated.
Who Needs an IT-4-OH?
A W-4 is the federal income tax withholding form that every employee fills out and provides to their employer. The IT-4-OH is the state version of this form for a person living in Ohio. Most Ohio workers should have both a W-4 and an IT-4-OH on file with their employers, so the proper amounts of federal and state tax are withheld from their paychecks.
If a person lives in Ohio or works for an Ohio company, it’s in their best interest to fill out an IT-4-OH withholding form. Even if a person is eligible for certain waivers or is exempt from Ohio income tax (such as a person who lives in Ohio and commutes to Indiana for work), they should still fill out an IT-4-OH.
What Happens if a Worker Doesn’t Have an IT-4-OH on File?
A few adverse things could happen if someone doesn’t fill out their IT-4-OH. If an employer doesn’t have your IT-4-OH on file, or if your form is incomplete, the employer must withhold the maximum amount from your checks. You technically have zero exemptions if there’s no IT-4-OH on file. If you have children or other dependents, you’re overpaying your taxes, and won’t get that money back until the following year at tax time.
The other thing to know is that Ohio has taxing school districts. If you live within the boundaries of one of these school districts, your employer is supposed to withhold taxes for that. If your employer doesn’t have an employee’s withholding exemption certificate IT-4-OH on file, they won’t withhold these taxes. Under-withholding will result in interest penalties when you pay your taxes.
Why You Should Keep Your IT-4-OH Updated
If you have a change in your life circumstances, it can change the amount you should be withholding on state and federal taxes. These changes include getting married or divorced, having a newborn baby, or adding a new dependent to your household.
If any of these changes happen, you should update both your W-4 and your IT-4-OH as soon as possible. If you are not claiming all your exemptions, you are overpaying taxes and have less take-home pay. If your employer is under-withholding, you have to pay back the taxes owed along with interest penalties.
How to Fill Out Withholding Exemption Certificate IT-4-OH
The IT-4-OH is to be filled out by the employee, signed and dated, and kept in their employment file by their employer. It’s a relatively simple form to complete and should take 10 minutes or less. Here are the different sections of the current IT-4-OH form that must be filled out.
Section I. Personal Information
- Full legal name
- Social Security Number (SSN)
- Complete address with city, state, and zip code
- School district of residence
- School district number
Tip: The Ohio Department of Taxation maintains a website called The Finder, which can be used to determine your school district and district number based on your home address.
Section II. Withholding Exemptions
- Line 1: Enter 1 unless you can be claimed as someone else’s dependent; in that case, enter 0.
- Line 2: Enter 0 if you are single or if your spouse files a separate tax return. Otherwise, enter 1.
- Line 3: Enter the total number of child dependents or qualifying non-child relatives in your household.
- Line 4: Add up the total of Lines 1 through 3 and write it on Line 4.
- Line 5 (Optional): You can choose an additional amount you would like withheld each month and enter it on this line.
Section III. Withholding Waivers
The employee should check each box in Section III that applies to them.
- Full-year Ohio resident who works in Indiana, Kentucky, Michigan, Pennsylvania, or West Virginia
- Resident military servicemember
- Non-resident military servicemember
- Non-resident civilian spouse of military servicemember
- Exempt from Ohio withholding
Categories of workers that are exempt from Ohio withholding taxes include agricultural workers, domestic service workers, providers of low-income services, foreign government services, underage paper deliverers, and non-trade services.
Section IV. Signature
On the last line, sign and date the employee’s withholding exemption certificate IT-4-OH.
At ASAP Payroll, we provide specific guidance for employers navigating the state’s tax requirements. You can find all the necessary Ohio New Hire Forms directly on our website. Contact us today to request a tailored quote and learn more about how we can help your business.
