Finance & Income Tax

Yes, Shelby City is a mandatory file city. Even if your employer takes out Shelby tax for you, you will still need to file. 

You will need to contact our office regarding this issue. We are available M-F 8a-4p 

Extensions are granted automatically when you file for a federal extension. A copy of your federal extension is required at the time of filing.  An extension to file the return is not an extension to pay any tax due at a later date. 

No, but the extension must be included with your return when you do file. 

No, the only way to e-file is through our city website. 

Yes. You must file a return on all business activity if you live, work, or 
conduct business in Shelby. Report self-employment activity and rental activity. 

There is no standard deduction. There are no exemptions. The tax is assessed at a flat rate. Business and rental losses deducted from W-2 wages are not permitted. However, business and rental losses may be used to offset business and rental profits on the same return, for residents only. 

Taxpayers who anticipate owing greater than $200.00 city tax must complete this line on the annual return. Nonresidents who have taxable income in Shelby must also complete this section. Failure to make timely estimated tax payments will result in penalty and interest assessments.

Yes. A late filing penalty will be assessed at the rate of $25 for tax year 2023. Previous tax years, 2020 through 2022, have a penalty of $150.00 per year. This late filing penalty applies regardless of the liability on the return. Tax filings and tax payments related to tax years beginning before January 1, 2016 are subject to the penalty. 

Taxpayers whose accounts are in good standing may be granted an installment plan via ACH debit of their checking or savings account. 

Simply submit a copy of your W2 form showing Shelby Tax being withheld.

An assessment is the income tax department’s legal billing notice of an outstanding tax liability

*Scrutiny Assessment – The Income Tax Department may request information, documents, and books of accounts for scrutiny assessment, which will be thoroughly examined. The income tax clerk then calculates the income tax payable by the taxpayer, and if there is a mismatch between the income and the tax due, the taxpayer can either pay the extra amount or receive a refund.

*Best Judgement Assessment – This assessment gets invoked in the following scenarios:
a. If the assessee fails to respond to a notice issued by the income tax department instructing the assessee to produce certain information or books of accounts.
b. If the assessee fails to comply with a Special Audit ordered by the Income-tax authorities.
c. The assessee fails to file the return within the due date, or such extended time limit as allowed.
The Income Tax Clerk will calculate based on all the relevant materials and evidence available.

*Income Escaping Assessment – When the Income Tax Department has sufficient reasons to believe that any taxable income has escaped assessment, they have the authority to assess or reassess the assessee’s income.

An individual can be assessed from late pay penalties that follow state regulations, or as complex as the estimation of income earned using prior years as a starting point to estimate for the current year.

Reasons for an assessment to be made:

1. Failure to File
2. Failure to submit all or some of the proper forms requested by the Income Tax Department
   1. 1040
   2. W2’s
   3. Applicable Schedule’s
   4. 1099’s
3. Nonpayment/Refusal of payment
   1. Bad Check
   2. Variance/Calculation Errors
   3. Fines/Fees

You can read more in the ORC 718.90 and Shelby City Ordinance 881.14