What is a residence or courtesy tax withholding?
This is simply the tax amount that an employer is withholding on your behalf to your city of residence because: 1) you work in a city where the employment city tax rate is less than your total local tax obligation to your city of residence and/or 2) your city of residence credit limit rate (the maximum tax rate that will be recognized) is less than the employment city tax rate and/or 3) your city of residence has a reduced tax credit percentage (less than 1.0 or 100%). You can also calculate this using the Rita Matrix.
