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Deborah D Smith, Administrator
Personal & School District Income Tax
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2009 1040 Draft
Line 4 - Personal/dependency exemption amount $1,550
Medical Savings Account – maximum contribution deduction per taxpayer is $4,197 by Dec.31, 2009
Moved line 17 – Interest Penalty on Underpayment of Estimated tax (now 28)
Line 29 – NEW Interest/Penalty Late-Filed/Late-Paid returns
Line 21d – Motion Picture Investment credit (more to follow)
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2009 1040EZ Draft
Lines 4 - $1550 exemption Moved line 13 – Interest Penalty on
Underpayment of Estimated tax (now 21) Line 22 – NEW Interest/Penalty Late-Filed/Late-
Paid returns
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2009 SD100 Draft
Tax type Earned Income verbiage
Line 1, not A & B Moved line 7 – Interest Penalty on Underpayment
of Estimated tax (now 16) Line 17 - NEW Interest/Penalty Late-Filed/Late-
Paid returns
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PIT Updates
NOL 5 Year Carry-back House Bill 1, 128th General Assembly - Conformity to
IRC; ARRA IRC 72(b)(1)(H): five-year effective October 16, 2008
SB155 - introduced on July 13, 2009 - defer refund dates If refunds are issued and SB 155 (or any subsequent bill
passed prior to December 31, 2009) becomes law, ODT would be required to bill for the amount refunded.
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PIT Updates
Amended Electronic Payment Options ePayments Credit Card online & IVR
Masking SS#’s on Notices Billings & Assessments
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PIT Updates (cont’d)
2010 Interest Rate 4% “Where’s My Refund” requirements
SSN, Birthdate & Tax type 1040 & SD Booklet population eMailer verbiage & population
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Recently-Enacted Budget Bill
Amendments to Various Tax Credits
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Motion Picture Credit
Newly Enacted - Income Tax and Corporate Franchise Tax Refundable Credit
If budgeted or actual motion picture production expenses exceed $300,000, then a credit equal to (i) 35% of wages paid to Ohio resident employees and (ii) 25% of all other production costs, excluding wages paid to nonresidents, purchased and consumed in Ohio.
Must file an application with the Ohio Dept. of Development
More information: www.discoverohiofilm.com
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Changes to the “Job Creation Tax Credit”
Amendments to ORC section 122.17 shift the credit base from personal and school district withholdings from new, full-time employees to a base consisting of incremental increases in all employees’ growth in withholding for the year as compared to the previous year.
Must file an application with the Ohio Dept. of Development
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Changes to the “Job Retention Tax Credit”
Amendments to ORC section 122.171 are similar to the amendments to the “Job Creation Tax Credit” provisions.
Required investment at the site is reduced from $200 million ($100 million if average wage is greater than 400% of federal minimum wage) to either $50 million if the taxpayer is a manufacturer or $20 million if the taxpayer engages in corporate administrative functions at the site.
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Changes to the “Job Retention Tax Credit” (cont’d)
Employee threshold has been lowered from 1,000 full-time employees to 500 full-time employees
This credit, which used to apply only against the CFT, the state income tax, and the CAT, now applies against the insurance premiums taxes.
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Changes to the “Historic Preservation Tax Credit”
Effective January 1, 2010 taxpayers organized as pass-through entities may allocate this credit in any manner the pass-through entity chooses
Previously allocated credit based upon each equity investor’s share of the pass-through entity’s profits.
Must file an application with the Ohio Dept. of Development
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School District Updates
Earned Income tax districts – nonfiling myth Updated: Taxpayers residing in earned
income school districts must file Ohio form SD 100 even if none of their income is subject to the tax.
SD Delinquency program
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School District Updates/Additions
SD# School District Rate Tax Type Status
0602 New Bremen LSD 1.00% Trad renewal
0603 New Knoxville LSD 1.25% Trad renewal
2004 Hicksville EVSD 1.50% Trad renewal
3201 Arcadia LSD 1.00% Trad renewal
3206 McComb LSD 1.50% Trad renewal
4604 Riverside LSD 0.75% Trad renewal
5010 Springfield LSD 1.00% Trad renewal
5903 Mt.Gilead EVSD 0.75% Trad renewal
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School District Updates/Additions
SD# School District Rate Tax Type Status
7106 Union-Scioto LSD 0.50% Trad renewal
8802 Mohawk LSD 1.00% Trad renewal
7504 Fort Loramie LSD 1.50% Trad renewal
8803 Upper Sandusky EVSD 2.00% Trad renewal
6901 Columbus Grove LSD 0.75% Trad renewal
8101 Crestview LSD 1.00% Trad renewal
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School District Updates/Additions
SD# School District Rate Tax Type Status
6908 Ottoville LSD 0.75% Trad new
1704 Crestline EVSD 0.25% E/I new
5101 Elgin LSD 0.75% E/I new
7506 Jackson Center LSD 1.00% E/I new
8705 North Baltimore LSD 1.25% E/I increase
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Personal Income Tax Mandate
Ohio Mandating Initiative House Bill 562 passed and signed by the Governor on
June 24, 2008 5747.082 ORC section Minimal estimated savings on mandating Personal
Income Tax is projected to be approximately $1.4 million.
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Personal Income Tax Mandate
Key Mandate Provisions
Effective for taxable year 2009Tax Professionals who prepare more than 75 returnsUnless you prepared less than 25 returns in the previous yearMandate is on Personal Income Tax returns.
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Personal Income Tax Mandate
Key Mandate Provisions
Does not include School District Income Tax returns Electronic payment is not part of the Personal Income
Tax mandate Only on original returns, not amended returns
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Personal Income Tax Mandate
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Personal Income Tax Mandate
How Ohio Compares to Other States
Mandate states average 75-80% paperless filings.
Ohio paperless filings in 2008 totaled 62% for PIT
and 55% for SDIT.
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Ohio e-file Mandate Getting Started
Step 1: Register for e-services at WWW.IRS.GOV
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Ohio e-file Mandate Do I have to Register with Ohio
If you are registered and approved by the IRS to participate in the e-file program
You are automatically registered and approved to e-file in Ohio.
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Ohio e-file Mandate Approved Software Companies
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Ohio e-file Mandate Approved Software Companies
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Ohio e-file Mandate Approved Software Companies
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Ohio e-file MandateOpt Out Request
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Ohio e-file MandateTaxpayer Waiver Request
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Personal Income Tax Mandate
Penalty Provisions
Provides a $50.00 penalty for each return starting with return number 76.
ODT intends to work with tax professionals to make conversion as painless as possible.
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Personal Income Tax Mandate
Penalty Phase In
Year One-2009 taxable year, 2010 calendar year ODT to evaluate Preparer totals and communicate to
Preparer.
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Personal Income Tax Mandate
Penalty Phase In
Year Two-2011 calendar year ODT to initiate Preparer Billing letters allowing
preparer to pay prior to Assessment ODT will offer reduced penalty amounts in year two.
Amount yet to be determined
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Personal Income Tax Mandate
Penalty Phase In Year Three-2012 calendar year ODT to fully implement penalty Preparer will receive Billing letter prior to Assessment.
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Ohio e-file New to Ohio e-file this Year
Accept Resident, nonresident and part-year School District returns
Only 1 school district return per taxpayer
You will receive an acknowledgement for your e-filed school district return
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Ohio e-file Modernized e-file
What is modernized e-file Accept Resident, nonresident and part-year
resident returns Will accept multiple school district returns You will receive an acknowledgement for your e-
filed school district return
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Ohio e-file Modernized e-file
Returns will be rejected Software problems
Invalid school districtsMFJ but no Spouse informationOhio line 1 doesn’t match FAGI
Practitioner correctionsRouting Number is invalidNot the same bank account number you used last year