Lorain local tax guide
Who pays Lorain's local tax
If your job is in Lorain, 2.5% is withheld whether you live in the city, in Elyria, Amherst, or Sheffield Lake. If you live in Lorain, the city taxes all your wages, and its credit for tax paid to the work city has been capped below Lorain's own rate since January 1, 2017. A Lorain resident who works in Cleveland or Elyria therefore pays the work city and still owes Lorain a smaller balance. A resident working in a township with no city tax owes Lorain the full 2.5%.
How Lorain's income tax works
Lorain, a Lorain County city of about 65,000 at the mouth of the Black River, taxes wages, salaries, commissions, and business net profit at 2.5%. The Treasurer and Income Tax Department administers the tax itself; Lorain is not a RITA or CCA member, unlike neighboring Elyria.
Before 2017 the city credited residents' work-city tax in full up to 2.5%. Starting with tax year 2017 it reduced that credit, so a resident who pays 2.5% to another city no longer clears the Lorain tax completely. Confirm the current credit with the department before you file.
The tax applies to Medicare wages, which include traditional 401(k) deferrals.
Worked example: $75,000 in Lorain
Here is a single filer with a $75,000 job in Lorain. Federal income tax takes $7,670, Ohio $1,288, Social Security $4,650, and Medicare $1,088. Lorain's 2.5% takes $1,875, leaving take-home pay of $58,429, about $4,869 a month.
In a community with no municipal tax, the same salary would net $60,304, so Lorain costs $1,875 a year.
The figures above assume you live and work in Lorain, or commute in. A Lorain resident with a job in another taxing city pays that city first and then owes Lorain the part of its 2.5% that the capped credit does not cover.
Withholding, estimates, and filing
Employers in Lorain withhold 2.5% and remit it to the city. If you live in Lorain and work elsewhere, ask payroll to withhold the Lorain balance too; otherwise the city requires estimated payments once your expected liability passes its threshold.
Residents file the Lorain return with the Treasurer and Income Tax Department, listing each W-2 and the tax withheld for other cities so the department can apply the credit.
How Lorain compares with other Ohio cities
Lorain's 2.5% matches Cleveland, Columbus, Akron, and five other listed cities, and only Youngstown's 2.75% is higher. Elyria, Lorain's county-seat neighbor, charges 2.25%, which costs $1,688 at $75,000, or $187 less than Lorain.
Farther east in Cuyahoga County, Lakewood charges 1.5% ($1,125) and Parma 2.5%. For a commuter who lives outside Lorain, the rate that matters is the one where the job is.
Tips for Lorain paychecks
Plan for a Lorain balance if you commute out
Because Lorain's credit stops short of its own rate, residents working in Cleveland or Elyria should expect to owe Lorain at filing.
Ask for courtesy withholding
An employer outside Lorain may agree to withhold the Lorain balance alongside its own city tax, which avoids a lump sum in April.
Compare total city tax before moving
If you keep a job in Cleveland, living in Lorain can cost more in combined city tax than living in a city with a full credit.