July 22, 2021
On June 30, 2021, Ohio Governor Mike DeWine signed the fiscal year 2022-23 budget bill. Below is a summary of tax changes included on the budget bill.
Personal Income Tax
Commercial Activity Tax
June 3, 2021
The Ohio Department of Taxation has updated its guidance related to the federal deduction for unemployment benefits for tax year 2020. Ohio conforms to the federal treatment of unemployment compensation, including the exclusion of $10,200 of unemployment income under the American Rescue Plan Act of 2021 (ARPA, PL 117-2). For taxpayers who filed federal and Ohio tax returns without the unemployment benefits deduction and are now waiting for the Internal Revenue Service (IRS) to issue a refund, after the IRS makes the adjustment, the taxpayer is required to: (1) file an amended Ohio IT 1040 (and an amended SD 100 for those who reside in a traditional tax base school district) to report new federal adjusted gross income (AGI); (2) include a copy of the IRS Tax Account Transcript showing the new federal AGI; and (3) complete the Ohio Reasons and Explanation of Corrections form (Ohio form IT RE or SD RE). The Department emphasizes that taxpayers who are required to file an amended return with the IRS related to their unemployment benefits must wait to file their amended Ohio IT 1040 (and amended SD 100, if applicable) until after their federal amended return has been accepted by the IRS.
May 5, 2021
The Ohio tax commissioner is temporarily permitted to waive any interest, penalty, and/or interest penalty for the underpayment of state and school district income taxes due on unemployment compensation received in 2020, provided that certain requirements are met. In order to qualify for the waiver: (1) the taxpayer must have received unemployment benefits in 2020; (2) such benefit is included in the taxpayer’s Ohio adjusted gross income and/or the taxpayer’s traditional school district income tax base; (3) the taxpayer timely filed the Ohio IT 1040 (and SD 100 if applicable); (4) the taxpayer accrued interest, penalty, and/or interest penalty as a result of nonpayment or underpayment of the 2020 tax liability related to the taxpayer’s unemployment income; and (5) the taxpayer has paid the tax due for 2020 in full when requesting the waiver. Taxpayers who deduct all their unemployment benefits when filing their federal income tax return do not qualify for the waiver. For specific information, please see Ohio’s Covid-19 FAQ website.
April 28, 2021
Ohio will offer a sales tax holiday during the period running from Friday, August 6, 2021 at 12:00AM to Sunday, August 8, 2021 at 11:59PM. During the holiday, the following items are exempt from sales and use tax: (i) an item of clothing priced at $75 or less; (ii) an item of school supplies priced at $20 or less; and (iii) an item of school instructional material priced at $20 or less. Items used in a trade or business will not exempt under the sales tax holiday. For more information regarding the sales tax holiday, please refer to the Ohio Department of Taxation’s Frequently Asked Questions (“FAQ”).
April 7, 2020
After passing recent legislation (see L. 2021, S18), Ohio is now in conformity with the Internal Revenue Code as of March 31, 2021. The Ohio Department of Taxation notes that taxpayers must remain mindful of any IRC provisions from which Ohio specifically decouples (a complete list of such decoupled IRC provisions can be found on Ohio Schedule A, Income Adjustments).
March 30, 2020
Ohio Tax Commissioner Jeff McClain announced that Ohio will be following federal in extending the deadline to May 17, 2021 to file and pay Ohio individual income and school district income taxes for tax year 2020. Penalties and interest will be waived on payments made during the extension. The extension, however, does not apply to the first quarter estimated income tax payment for tax year 2021 which is still due by April 15, 2021. (News Release: Ohio Moving Income Tax Filing and Payment Deadline to May 17, Ohio Dep’t. Rev, 03/24/2021.)
March 21, 2020
The Ohio Department of Taxation reminds all sales and use tax taxpayers that the February 2020 monthly sales and use tax returns are due March 23, 2020. Taxpayers are required to file sales and use tax returns electronically via the Ohio Business Gateway at gateway.ohio.gov. Alternatively, taxpayers may file sales tax returns for county vendor’s licenses (vendor’s license numbers beginning 01-88) through TeleFile by calling (800) 697-0440. Learn more here.
Disclaimer: Please note this is the information that is readily available at this time, it is subject to change so please consult your Withum tax advisor.