(The Center Square) – A former Akron physician’s assistant wants taxes taken from a settlement payment returned by the city, and she’s continuing a court fight to get the money.
With the help of The Buckeye Institute, Karen Kresevic appealed a lower court ruling that allowed the city to retain taxes it had collected from Kresevic’s settlement with Akron City Hospital.
The Buckeye Institute says the settlement did not represent wages, and Kresevic wasn’t working for the hospital when the money was paid.
“The city of Akron stretched the law to take a cut of Ms. Kresevic’s settlement in breach of its own tax ordinances and forms,” said Jay R. Carson, senior litigator at The Buckeye Institute and an attorney for Kresevic. “This case allows the court of appeals to correct the trial court’s errors and rein in local governments’ illegal taxation.”
Kresevic was a physician assistant working at the hospital in 2020 during the pandemic and filed a wrongful termination claim. She reached a settlement with the hospital that was taxed.
She asked for a tax refund in 2022 but was denied.
The city said Ohio House Bill 197, which was passed as an emergency, allowed cities to continue to withhold municipal income taxes even if employees worked remotely not in the city.
A Summit County court initially ruled Kresevic filed her claim beyond the one-year statute of limitations, but Carson says the date should have started when she filed her tax return, not when she received the settlement.
Also, the court said Kresevic voluntarily paid the tax because she asked for a refund on tax day in 2022, rather than the day the taxes were withheld from the settlement.
