Ohio practitioners - general question

[Catherine]

Hi folks,

I have a client who moved to Ohio in Q4 2022, and I haven't done an Ohio return in over 15 years. Are there any gotcha's I need to look out for? From the lists I have he's at least not in a town with local taxes.

Any pointers or things to watch for would be greatly appreciated.

[Margaret CPA in OH]

Check for part-year tax credit on Schedule of Credits and IT NRC to allocate income within and without Ohio.  You may also use Ohio IT 2023 Income Allocation and Apportionment Nonresident Credit.  If retired and receiving retirement income, check nonrefundable credits on the schedule of credits.  If over 65 with low enough income, there may be a $50 senior citizen credit.  That's a start.  Ask for more particulars, there are several OH preparers here, I think.

[Jim Oh Bkkr]

With a 4th Qtr move, it may be moot, but always look at MFS for a couple. (Federal taxable income in the SAME bracket, w/o MFS traps.  ie. SS being taxable if living together.)

Income from direct treasury investments is exempt. (Most brokerage houses either calculate, or give the %s of applicable mutual funds.)

True "survivor", disability (prior to min ret age), military pensions, ALL railroad retirement are exempt.

Medical OOP over 7.5% is deductible.

Look for school district taxes in addition to local.  In southern Ohio, there is practically NO SD taxes (thank gosh), but I've encountered a hand full.

[BTS]

Use this site Ohio put up to check tax implications based on address.  I've only came across one situation where it was not correct.  And the error was based on school income tax.  And a quick county property tax record search showed the proper school.  One side of the road was one school and the other side was a different school.  https://tax.ohio.gov/help-center/the-finder/the-finder 

[Catherine]

Many thanks to all and I'll check the site (think I already looked at it, but I'll check again) as well as the apportionment schedules/forms. This is a young couple with a passle of kids; mom did some online tutoring a year or so ago but with a new baby (expected then arrived) she did nothing of the kind in 2022.

[JimTaxes]

Schedule IT BUS exempts certain business income and certain other income. 

[Jim Oh Bkkr]

19 hours ago, Catherine said:

young couple with a passle of kids

And if they're low(ish) income, Ohio has a NON-refundable EIC (based on Fed EIC).

[Catherine]

@Margaret CPA in OH and @Jim Oh Bkkr - what about a couple who lives in an unincorporated area? Do they still owe the "city" tax for the city of their official address, even if they're in an unincorporated locale?

[Margaret CPA in OH]

No, they do not unless they work in that municipality.  We live in a township (very common here).  When my husband worked at the university in Cincinnati, tax was withheld.  He retired before COVID but now WFH people not actually working within a taxing district do not have to pay that income tax.  Cities still fight it.  The 'official' address you mention is likely just the post office.  Our post office area is Cincinnati but we are not Cincinnati residents.  Clear as mud?

[Jim Oh Bkkr]

And there "should" NOT be a filing requirement for the local, IF tax is withheld because they "work" in the locale.  Now if they own a business (or rental) in the locale...

[Catherine]

12 hours ago, Jim Oh Bkkr said:

And there "should" NOT be a filing requirement for the local, IF tax is withheld because they "work" in the locale.  Now if they own a business (or rental) in the locale...

Husband has a consulting business but for 2022 all he had was expenses; no income (too busy with new baby and cross-country move, but kept up web site and webmail). Does that count towards a filing requirement?

[Margaret CPA in OH]

Determine whether there can be a loss carry forward.  Many/most municipalities will allow some sort of carry forward so establish that.  If there is a loss on the federal that can be carried forward, it will carry over to that extent on the following year and Ohio begins with federal AGI.  I am not sure how a part-year loss in 2022 would be carried to full year 2023 but would go with it, I think.  But I can't think too much more tonight.

[Jim Oh Bkkr]

10 hours ago, Catherine said:

Does that count towards a filing requirement?

Only if there is a "physical" location (or travels into the location to conduct business) within the taxing locale.  (ex. I had a truck driver, lived in the county, came into town to load [US Mail].  Did NOT file or pay local as our local rules were 2 hour presence within the city limits.))

[Margaret CPA in OH]

And don't forget the 12 day occasional entry rule.  This has worked for a client who does consulting in two places but is physically never in either for more than a few days.