Why is City taxable income on my W-2 higher than Federal or State taxable income?
It is federal and state tax policy to give tax preference or to defer tax on some types of income. For example, to encourage people to save for retirement, income put into a pension plan is not taxed for federal or state purposes until it is received as a pension. Cities in Ohio, however, do tax that income when it is earned (set aside), but dont tax it when its paid out in your retirement years.
It is federal and state tax policy to give tax preference or to defer tax on some types of income. For example, to encourage people to save for retirement, income put into a pension plan is not taxed for federal or state purposes until it is received as a pension. Cities in Ohio, however, do tax that income when it is earned (set aside), but don’t tax it when it’s paid out in your retirement years.
Related Questions
- My W-2 has differing amounts in the federal income box, the local income box and the medicare box. Which amount should I show as taxable wages for my city income tax return?
- Why are unemployment wages taxable income, if federal and state unemployment taxes are deducted from my wages when I work?
- Why is City taxable income on my W-2 higher than Federal or State taxable income?
