Wednesday, December 19, 2001

Count on refund, but not soon

By Cindy Schroeder
The Cincinnati Enquirer

        INDEPENDENCE — Virtually anyone who earned wages in Kenton County in 2001 will qualify for refunds next year from a contested payroll tax increase repealed by Kenton Fiscal Court.

        However, don't call the county to find out when your check will be in the mail.

        County Treasurer Ivan Frye said Tuesday that individual refunds will be calculated only after employers submit copies of employees' W-2 forms, showing how much Kenton County payroll tax was withheld for each of their workers.

        Because the county must receive W-2 forms from employers before it can begin processing individual refunds, Mr. Frye said, there will be no master list of individuals who are owed refunds.

        Employers are required to file copies of W-2s with the Internal Revenue Service by Feb. 28, so the county expects to receive the necessary paperwork to begin processing payroll tax refunds no later than that date.

        “As we get the W-2s, we will begin issuing refunds,” Mr. Frye said.

        Mr. Frye estimated the county will issue more than 50,000 refunds, which is equivalent to the number of checks his office normally writes in three years.

        “As Ivan has suggested, this is a monumental task, but we will do our best to expedite refunds,” Kenton Judge-executive Dick Murgatroyd said Tuesday.

        Mr. Frye estimated refund checks should be in the mail no later than May.

        “Any individual who has had occupational license fees withheld from their pay and remitted to Kenton County (in 2001) will receive a refund of at least 14 cents per $100 of earnings,'' Mr. Frye said.

        Also, businesses whose business year ends Dec. 31, 2001, should pay no more than $313.20 in Kenton County occupational license fee net profits tax for that year. This will enable the county to avoid having to make refunds to those businesses, Mr. Frye said. Any business that already has filed a return for 2001 remitting more than $313.20 will receive a refund with interest.

        Last week, Kenton Fiscal Court voted 3-0 — with Commissioner Barb Black absent — to refund payroll tax revenues ruled illegal by a Kenton Circuit Court judge, even as they commission appeals that ruling to the Kentucky Court of Appeals. The county began collecting those revenues on Jan. 1.

        In keeping with the judge's ruling, the fiscal court also agreed Tuesday to roll back the overall rate of the four components that make up the county payroll tax — from 0.85 percent to 0.71 percent — retroactive to Jan. 1.

        Under the new plan, someone earning $80,400 a year would have owed $238.20 in annual county payroll taxes for 2001, instead of $683.43 — for a refund of $445.23, Mr. Frye said.

        Conversely, someone earning $15,000 would be due a refund of $21.04. For a $25,000 annual wage earner, the refund would be $35.07. Someone earning $50,000 a year would receive a refund of $220.14, while a $75,000 annual wage earner would get back $405.22.

        In 2002, the payroll tax rate will be 0.7097 percent for the first $25,000 in wages and 0.1097 percent for earnings over $25,000 up to the new Social Security maximum of $84,900.


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