Using the OH school district (SD) tax withholding involves additional steps based on the number of school districts you have, and whether the district(s) determine gross (taxable) wages by subtracting any specific withholdings.

Before You Begin

Download the “General” Withholding Formula for the Ohio School District Tax.

Configuring the Withholding

  1. Select “General” as the Category on the Payroll Formulas screen.
  2. Ask your accountant (or school district) if you need to exclude certain withholdings from the gross wages that will be taxed—if not, skip this step.
    1. Double click the OhioSDIT withholding to open the formula for editing.
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    2. Once the formula is open, click the drop down list (image below) to get a list of item names that might be subtracted from gross income for your particular calculation of the school district’s tax.
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    3.  In the example below, we have added the highlighted line, reducing taxable wages for the OH SD withholding by the amount of child care withheld (shown as ccare) and federal income tax withheld (shown as fedinctx).

    Important! You MUST assign those general withholdings (like child care and federal income tax) to everyone using the OH SD withholding, even if they have nothing withheld for those categories.
    pr-withholding-ohiosd-formula-line

  3. Add the OH SD withholding to the Employee Withholdings screen for each person as needed..
  4. Upon adding the withholding, you will be prompted to set the variable rate for that employee’s school district, based on their residence.
  5. Optional: If you need a separate liability account for each school district’s withholding amount, repeat steps 2-4 for as many districts as desired. At step 2, you will highlight the original formula, and click on the New Formula button (bottom left of that screen), and create a new subclass and groupname each district. Then, use  Payroll GL Assignments to have each school district’s withholding go to a different GL liability account.
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