OH Lump Sum Retirement/distribution credit

[Janitor Bob]

Any Ohio preparers out there....Do you have any experience with the OH lump sum retirement credit and/or lump sum distribution credit?

I have a client, age 65, that received a lump sum distribution from a pension. It was through an employer that she had worked with long ago. There was rumors that the pension fund was in trouble, so she took a one-time $52,000 lump sum distribution. They held out federal tax, but not OH, so she is good with Fed, but hurting on Ohio. I am wondering if I should explore the lump sum distribution credit.

She is still working for her current employer, so not really retired....so I do not think the lump sum retirement credit is applicable. However, I am wondering if the lump sum distribution credit would help. She would receive a $1,000.00 credit now, but never again be able to take the $50.00 retirement credit that those over age 65 get each year.

I am just not certain she qualifies because of one requirement:

"6. Was the distribution made because either (i) the employee died, quit, retired, was laid off or was fired or (ii) the taxpayer (if self employed) became totally and permanently disabled?"

client did quit this employer...but it was 15 years ago.....so not sure if this satisfies # 6...any thoughts?

[Janitor Bob]

Bump...anybody? Buehler?

[Jim Oh Bkkr]

Assuming items 1-5 were met, I would be nervous about item 6 also. Based on your facts, the distribution was NOT made because of any of the listed occurences.

However, the Instruction booklet is a POOR excuse for Ohio tax law. Have you read aplicable section(s) of the ORC?

I don't have it in front of me at the moment, but it may prove useful.

Jim

[Margaret CPA in OH]

http://codes.ohio.gov/orc/5747 Try somewhere here maybe.