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Qualifying Wages

The earnings tax of 1% applies to all who live, work, operate a business within, or do business within the City of Madeira. The 1% earnings tax is levied on all earned income, including gambling and lottery winnings.

Taxable Income
Taxable income includes, but is not limited to:

  • Salaries and wages (W-2 box five Medicare wages)
  • Commissions
  • Employee contributions to deferred compensations plans and other qualified and non-qualified retirement plans
  • Housing allowance
  • Stock option income
  • 1099 Misc.
  • Gambling and lottery winnings
  • Net profit of any businesses, including Schedule C income
  • Rental income
  • Partnership income
  • Other business activities
Tax Credit
Residents employed in another city where the tax rate is 1% or higher and whose wages are totally taxed by that city will receive a credit not to exceed .9% of the wages taxed by that municipality. Income taxed at a tax rate less than .9% will receive full credit for the the tax paid to the other municipality. If a resident's earnings are only partially taxable to the city where employed, the portion of income that is not taxed becomes taxable to the City of Madeira at a rate of 1%, while the portion of income that was taxed at a rate of 1% or higher will receive credit for that tax paid not to exceed .9%. 

Non-taxable Income
We do not tax interest, dividends, capital gains, pension, social security, and unemployment income.

Other
Gambling Losses: Professional gamblers ONLY can deduct gambling losses up to the extent of their gambling winnings.
 
2106 Deductions: In the past, these deductions were usually claimed for un-reimbursed business expenses and other miscellaneous expenses at both the Federal and City levels. These deductions are no longer allowed at the Federal level; since the Ohio Revised Code ties the allowance of these deductions at the City level to the federal limitation, the City of Madeira will no longer allow the deduction of these expenses.
 
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