Kettering local tax guide
Who pays Kettering's local tax
Every Kettering resident 18 or older must file a city return each year, whatever their income or job status. Residents owe 2.25% on wages earned anywhere, less a credit for tax paid to the work city, capped at 2.25%. A resident commuting to Dayton has 2.5% withheld there and owes Kettering nothing. Nonresidents pay Kettering only on work done inside the city, through withholding at 2.25%; if an employer withholds less, the nonresident must file too.
How Kettering's income tax works
Kettering, a Montgomery County city of about 58,000 just south of Dayton, levies a flat 2.25% on wages, commissions, and business net profit. The Kettering Income Tax Division administers the tax in-house, so residents file with the city rather than with RITA or CCA.
The resident return starts from Medicare wages in box 5 of the W-2, so traditional 401(k) deferrals are taxed. On the return, credit for tax withheld by other cities is limited to 2.25% of the wages taxed there.
Kettering has required all adult residents to file since tax year 2012. Permanently retired or disabled residents whose only income is Social Security, pensions, interest, or dividends can file a one-time Declaration of Exemption instead.
Worked example: $75,000 in Kettering
A single filer earning $75,000 at a Kettering job owes $7,670 in federal income tax, $1,288 in Ohio tax, $4,650 in Social Security, and $1,088 in Medicare. The Kettering tax is $1,688. What reaches the bank is $58,617 a year, or about $4,885 per month.
With no municipal tax, take-home would be $60,304, so Kettering costs $1,688 at this salary. The same salary in Dayton costs $1,875, which is $187 more.
For a Kettering resident commuting to Dayton, the extra $187 goes to Dayton, not Kettering. Kettering's credit wipes out its own tax but cannot refund the portion of Dayton's rate above 2.25%.
Filing with the Kettering Income Tax Division
Federal e-filing software does not send anything to Kettering, so the city return is a separate step. You can e-file it with the city, mail it, or have the Tax Division's staff prepare it for free at the government center if you bring your W-2s and copies of other city returns.
Nonresidents who work for a Kettering employer but spend some days working elsewhere can claim those days on the city's worksheet for days worked outside Kettering. Taxpayers whose income is not withheld at the full 2.25% may need to make quarterly estimated payments.
How Kettering compares with other Ohio cities
Kettering's 2.25% ties Elyria among the Ohio cities on this site. It is below Dayton and the eight other 2.5% cities, below Springfield's 2.4% ($1,800 at $75,000), and below Youngstown's 2.75% ($2,063).
Hamilton, Dublin, Mansfield, and Cuyahoga Falls charge 2%, or $1,500 at $75,000, which is $188 less than Kettering. Cincinnati's 1.8% costs $1,350.
Tips for Kettering paychecks
File even if you owe nothing
Kettering requires a return from every resident 18 and older. A resident working in Dayton usually owes nothing but must still file.
Use the free preparation service
The Tax Division prepares Kettering returns at no charge, with no appointment, if you bring your W-2s and any other city returns.
Claim days worked outside the city
Nonresidents with Kettering withholding for days spent working elsewhere can request a refund using the city's days-worked worksheet.
Retirees can stop annual filing
If your only income is Social Security, pensions, interest, or dividends, file the Declaration of Exemption once.