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Business Returns

The 2024 tax filing deadline is monday, april 15, 2024

FRANKLIN CODIFIED ORDINANCE

Tax returns will not be mailed, please use the forms provided here. 
You may also obtain forms by visiting or calling our office 937-986-1035.
Please submit signed completed forms along with required documents by the FEDERAL FILING DEADLINE.
Returns may be submitted in person, in our drop box or mailed to:
Franklin Income Tax Division
1 Benjamin Franklin Way
Franklin OH 45005

Pay Your Taxes Online

TAX RETURN FILING REQUIREMENTS:
  • All businesses located within City limits must file a return, even if no tax is owed.
  • All non-resident businesses, individuals and landlords who have income (or loss), perform work or services in the City, or own rental property within the City limits must file.
  • All tax returns prepared by a third party must be submitted to the City by the resident or business. Third party electronic filing is not accepted by the City income tax department.
  • Filing is required even if no tax is due. 
REQUIRED DOCUMENTS:
The following documents are required to be included with your completed & signed Franklin income tax return:
  • Schedule X
  • Schedule Y
  • Federal Income Tax Return, first five pages at minimum.
Business apportionment:753.06 INCOME SUBJECT TO NET PROFIT TAX
Net profit from a business or profession conducted both within and without the boundaries of the City shall be considered as having a taxable situs in the City for purposes of City income taxation in the same proportion as the average ratio of the following:
    1. The average original cost of the real property and tangible personal property owned or used by the taxpayer in the business or profession in the City during the taxable period to the average original cost of all of the real and tangible personal property owned or used by the taxpayer in the business or profession during the same period, wherever situated. As used in this division (b)(1)A., tangible personal or real property shall include property rented or leased by the taxpayer and the value of such property shall be determined by multiplying the annual rental thereon by eight (8);
    2. Wages, salaries, and other compensation paid during the taxable period to individuals employed in the business or profession for services performed in the City to wages, salaries, and other compensation paid during the same period to individuals employed in the business or profession, wherever the individual's services are performed, excluding compensation from which taxes are not required to be withheld under Section 753.05(b) of this chapter;
    3. Total gross receipts of the business or profession from sales and rentals made and services performed during the taxable period in the City to total gross receipts of the business or profession during the same period from sales, rentals, and services, wherever made or performed.
If the apportionment factors above do not fairly represent the extent of a taxpayer's business activity in the City, the taxpayer may request, or the Tax Administrator may require, that the taxpayer use, an alternative apportionment method involving one (1) or more of the following:
  1. Separate accounting;
  2. The exclusion of one (1) or more of the factors;
  3. The inclusion of one (1) or more additional factors that would provide for a fairer apportionment of the income of the taxpayer to the City;
  4. A modification of one (1) or more of the factors.
Businesses can now elect to apportion net profits to employees’ reporting location and not the location where employees are performing remote work. This change only applies to net profit filings and does not affect the employer’s obligation to withhold in remote work locations.

Adjusted federal taxable income:
Federal taxable income before net operating losses and special deductions as determined under the Internal Revenue Code, adjusted as follows:

  1. Deduct intangible income to the extent included in Federal taxable income. The deduction shall be allowed regardless of whether the intangible income relates to assets used in a trade or business or assets held for the production of income.
  2. Add an amount equal to five percent (5%) of intangible income deducted under definition "Adjusted Federal Taxable Income" division (a) of this section, but excluding that portion of intangible income directly related to the sale, exchange, or other disposition of property described in section 1221 of the Internal Revenue Code.
  3. Add any losses allowed as a deduction in the computation of Federal taxable income if the losses directly relate to the sale, exchange, or other disposition of an asset described in section 1221 or 1231 of the Internal Revenue Code.
  4. Add taxes on or measured by net income allowed as a deduction in the computation of Federal taxable income.
  5. In the case of a real estate investment trust or regulated investment company, add all amounts with respect to dividends to, distributions to, or amounts set aside for or credited to the benefit of investors and allowed as a deduction in the computation of Federal taxable income.
  6. Deduct, to the extent not otherwise deducted or excluded in computing Federal taxable income, any income derived from a transfer agreement or from the enterprise transferred under that agreement under ORC 4313.02.
  7. For tax years beginning on and after January 1, 2018, deduct exempt income to the extent not otherwise deducted or excluded in computing adjusted federal taxable income. For tax years beginning before January 1, 2018, see 753.03 Definitions (h)(1).
  8. Deduct any net profit of a pass-through entity owned directly or indirectly by the taxpayer and included in the taxpayer's Federal taxable income unless an affiliated group of corporations includes that net profit in the group's Federal taxable income in accordance with Section 753.06(c)(5)C.(ii).
  9. Add any loss incurred by a pass-through entity owned directly or indirectly by the taxpayer and included in the taxpayer's Federal taxable income unless an affiliated group of corporations includes that loss in the group's Federal taxable income in accordance with Section 753.06(c)(5)C.(ii).
ORC Section 718.01 defines taxable net profit. The Code provides a list of the statutory adjustments that must be made when computing a taxpayer’s taxable net profit subject to apportionment. There is no statutory authority for any adjustment to reverse the reductions in federal expenses related to the various federal jobs and other credits. Thus, by choosing to claim a federal credit, a taxpayer also chooses to reduce certain deductions for both federal and municipal tax purposes.

ESTIMATED TAX REQUIREMENTS: 753.07 DECLARATION OF ESTIMATED TAX
Pay your estimated tax online here!
If your tax liability is $200.00 or more for the current taxable year you must pay as follows:
  • 1st quarter due April 15th
  • 2nd quarter due June 15th
  • 3rd quarter due September 15th
  • 4th quarter due January 15th for individuals, December 15th for businesses
The safe-harbor provision is that you pay at least 90% of your tax liability for the current taxable year no later than January 15th  for individuals and December 15th for businesses; or the amount of estimated taxes that were paid equals at least 100% of the tax liability shown on the return of the taxpayer for the preceding taxable year paid no later than January 15th for individuals and December 15th for businesses, provided that the immediate preceding taxable year reflected a period of 12 months and the taxpayer filed a return with the city under section 753.09 of this chapter as described in the local tax ordinance for that year.

EXTENSION:
Any taxpayer that has requested a six month Federal Extension will also receive an extension for the filing of a City income tax return.  The extended due date of the City return for businesses is the fifteenth day of the eleventh month after the year end.
  • Federal extensions must be attached to the tax return when filed. 
  • An extension of time to file is not an extension of time to pay the tax due.  A penalty and interest charge will be assessed for all payments received after the original deadline. 
  • If no extension is filed, a late filing fee will apply. 
  • A taxpayer that has not requested or received a six month extension for filing the Federal income tax return may request the Tax Administrator to grant a six month extension of the date for filing the City income tax return
    • The City extension request form can be found here.
    • The request must be received by the filing deadline. Requests are not accepted after the filing deadline has passed.
PENALTY AND INTEREST CHARGES:
  • Penalty for failure to pay tax by the due date is 15% of the tax balance.
  • Interest is accrued monthly. Rates are posted here. 
  • Beginning in tax year 2023, penalty for failure to file your income tax return by the due date is $25.00.
  • Prior to tax year 2023, penalty for failure to file your income tax return by the due date was $25.00/month. $150.00 maximum fee. 
NOLS:
  • Prior year losses can be carried forward up to five years. 
  • 100% of prior year losses can be used to make your income zero.
  • Prior year losses can not be used to make current year losses larger.
  • Tax years 2018-2022 losses were limited at a 50% deduction for five years. Read more here & access the Ohio worksheet here.
REFUNDS:
  • Refunds can be requested for tax overpayment or erroneous payments of more than $10.00.
  • Refund requests must be filed within three years after the tax was due or paid, whichever is later. 
    • Failure to remit all documentation will cause delay in processing and/or disallowance of credits/losses.
  • Interest will be paid on any tax refund that is not issued within 90 days after the completed return is filed. 
  • Taxpayer with accounts that are not in good standing will be denied their refund request. Your account may not be in good standing if:
    • There is a delinquent balance due.
    • The account has been sent to collections.
    • Prior year tax returns have not been filed.
    • Estimated tax payments are not current.
Employer Withholding:
Employers must file an annual Withholding Reconciliation Return (W3) with the City of Franklin Income Tax Division by the last day of February of each year.
  • New in 2024! Reconciliations are accepted in electronic formats.
  • All W-2s are required to be submitted with the W3.
  • Employers may submit a listing of all the information contained in the W-2s if copies of the W-2s are not available.
  • W-2s for every other city withheld must be submitted with the Annual Reconciliation
  • Tax shortage found during the reconciliation process will be subject to penalty & interest. 
  • Refunds for overpayment of tax must be requested in writing. 
Mandatory Withholding Tax
Tax is required to be withheld for employees working in the City. This also applies to employees working from home. 
  • Pay your withholding tax online here!
  • Need to register your business? Find the business registration form here. 
    • Payments are not accepted until registration is complete.
  • Each employer, agent of an employer or other payer located or doing business in the City must withhold from each employee 2% of the qualifying wages earned by the employee in the City.
  • An employer, agent of an employer or other payer shall deduct and withhold the tax from qualifying wages on the date that the employer, agent or other payer directly, indirectly or constructively pays the employee.
  • An employer, agent of an employer or other payer shall make and file a return showing the amount of tax withheld by the employer, agent or other payer from the qualifying wages of each employee. Withholding tax forms can be found here.
  • Tax should not be withheld on third party sick pay, cafeteria plans (IRC Section 125), stock options*, nonqualified deferred compensation income. See our full list of non-taxable income here.
  • An employer is required to withhold only on “qualifying wages”, which are wages as defined in IRC Section 3121(a), generally the Medicare Wage in Box 5 of the Form W-2, with an exception to include exempt employees hired before April 1, 1986.
    • 401K, 457 and Supplemental Unemployment Compensation Benefits. This should be included in Box 5 of the W2 and subject to withholding requirements.
  • Tax must be paid monthly if the total taxes deducted and withheld or required to be deducted and withheld by the employer, agent or other payer on behalf of the City in the preceding calendar year exceeded two thousand three hundred ninety-nine dollars ($2,399.00), or if in any month of the preceding calendar quarter exceeded two hundred dollars ($200.00). Monthly payments must be made not later than fifteen (15) days after the last day of each month.
    • Penalty for late filing of quarterly or monthly withholding return is $25.00 for periods ending after October 3, 2023. Prior to October 3, 2023 the late filing penalty was $25.00/month, $150.00 max.
    • Penalty for late payment of withholding tax is 50% of the tax balance. 
    • Interest is accrued monthly. The 2024 interest rate is 10% annual, .833333% monthly. Prior year interest rates are published here.
*Disqualifying Disposition of an Incentive Stock Option-employer is not required to withhold, but the income is considered “qualifying wages” and the recipient is liable for the tax. 

Courtesy Withholding Tax
Tax that is withheld as a courtesy for City residents working in a locality that has no tax or a tax rate less than 2%.
  • Pay your withholding tax online here!
  • Use the Warren County Auditor's page to ensure that the employees address is in City limits. See "Tax District" on the property summary page.
  • Need to register your business? Find the courtesy withholding registration form here.
    • Payments are not accepted until registration is complete.