The City of Tipp City has a mandatory filing requirement.
This means each resident (18 yrs. of age or older) or business operating within the city must file a return each year with the city regardless of any tax due on the return. The rate of tax is 1.5% with 1.5% credit for income taxes paid to another municipality. Estimated payments are due if the amount of tax liability to be paid with the return is greater than $200.00. Penalty and interest are assessed for failure to make estimated payments.
Business losses of Tipp City residents may be used to offset earned income when the losses are incurred in Tipp City or in a jurisdiction having a tax rate less than 1.5%. When such losses are incurred in another city, only the portion of the loss attributable to the difference in tax rates may be used as an offset. The actual location of the loss must be considered when determining if a loss is allowable.
There is no exclusion or deduction from Tipp City taxation for the following : 1/2 self-employment tax; self-employed health insurance premiums; greater than 2% s-corp owner health insurance premiums; the Federal non-deductible portion of meals & entertainment; net operating loss carry-forward/carry backs.
Required attachments for individual returns include the federal Form W-2 reporting municipal taxable income and municipal tax withheld and/or copy of other city’s tax return showing tax paid to that city, federal Schedules C, E, and F, and Form 2106 to the extent applicable.
Required attachments for business returns include the applicable federal Form 1120, 1120A, 1120S, 1065 or 1041 to include Schedules A through M-2. IRS.GOV
Spouses may elect to file separate or joint returns regardless of federal and state filing elections. There is no city tax advantage for a husband and wife to file separate city returns.