Information current as of June 30, 2021.
COVID-19 has changed life across the globe. Many taxing jurisdictions are taking mitigating actions to create social distance and aid taxpayers. The following is a running list of actions by jurisdiction, which generally result in additional time to file and/or pay. Further, many jurisdictions have closed their offices to in-person use by taxpayers and suspended their audit and administrative functions. This alert doesn’t cover similar waivers from local-level taxing authorities. These developments continue to quickly evolve; check with your BKD Trusted Advisor™ or visit our COVID-19 Resource Center for current information as needed.
Information Specific to Ohio
- Ohio updated guidance on taxation of COVID-19 tax relief by clarifying the type of grants that are included in gross receipts for purposes of the commercial activity tax. Such grants include, but aren’t limited to, county-issued grants, small business relief grants, and grants from the Bar and Restaurant Assistance Fund.
- Ohio Department of Taxation, COVID-19 Tax Relief FAQs; January 1, 2021.
- Ohio announced it’s extending the deadline to file and pay Ohio individual income and school district income taxes for tax-year 2020 to May 17, 2021. Ohio will be waiving the penalty on tax due payments made during the extension. Also, there will be no interest charges on payments made during the extension. The first-quarter estimated income tax payment for tax-year 2021 isn’t affected by this extension and must still be made by April 15.
- Ohio Department of Taxation, News Release; March 24, 2021.
- Ohio legislation updates the state’s IRC conformity date to March 31, 2021, and incorporates changes made by the 2021 Consolidated Appropriations Act (CAA) and the American Rescue Plan Act of 2021. A taxpayer can irrevocably elect either 1) the version of the IRC adopted by the state as of the end of the taxpayer’s taxable year; or 2) the version of the IRC as it existed after the state’s conformity. The law exempts the second draw Paycheck Protection Program (PPP) loan amounts forgiven under the CAA from the commercial activity tax. A similar exemption already exists for first draw PPP loan amounts forgiven under the Coronavirus Aid, Relief, and Economic Security Act. Ohio may now temporarily abate any interest or penalties for the underpayment of state and school district income taxes due on unemployment benefits received in 2020. Also, individuals will now be able to elect to have state income tax withheld from their unemployment benefits.
- Ohio S.B. 18, effective March 31, 2021.
- Ohio Department of Taxation, Ohio Conformity Updates; April 1, 2021.
- Ohio provided guidance on state tax treatment of unemployment benefits enacted in the federal ARPA. Due to the enactment of ARPA, the IRS is allowing certain taxpayers to deduct up to $10,200 in unemployment benefits. Ohio doesn’t have a deduction for unemployment benefits but will permit any federal exclusion under ARPA to flow through to the Ohio return. Therefore, if a taxpayer doesn’t qualify for the federal deduction, then all unemployment benefits included in federal adjusted gross income are taxable.
- Ohio Department of Taxation, News Release; April 7, 2021.
- Ohio announced that it extended to all four quarters of 2020 the waiver of interest and penalty charges for late filing and payment of state unemployment insurance (SUI) tax returns. Although the filing deadlines for all 2020 SUI tax returns and payments weren’t extended, employers that were unable to file their returns and pay the corresponding payments due to COVID-19 aren’t penalized or assessed penalties under Ohio Emergency Order 2020-03D. For employers that submitted any of their 2020 SUI returns and tax payments late, the Department is waiving the late reporting penalty and late payment interest assessment once the returns are filed and taxes are paid in full. For reports and payments the Department received between May 1, 2020, and January 31, 2021, the Department automatically waived the late penalty and interest and didn’t require employers to submit waiver requests. For late returns filed and payments received after January 31, 2021, employers are required to submit waiver requests by filing Ohio Form JFS 20132 on paper via the Department’s electronic reporting system. The Department will waive the late reporting penalty and interest once waiver requests are received and processed.
- Ohio Department of Job and Family Services, FAQ Announcement; April 14, 2021.
- Ohio provided guidance related to the federal deduction for personal income taxpayers who filed prior to the enactment of the American Rescue Plan Act of 2021 so therefore didn’t use the unemployment benefits deduction and are waiting for the IRS to issue a refund. After the IRS makes the adjustment, the taxpayer must do all of the following: 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 your new federal adjusted gross income (AGI); 2) include a copy of your IRS Tax Account Transcript showing your new federal AGI, which is available on the IRS’ website or by calling 800.908.9946; and 3) complete the Ohio Reasons and Explanation of Corrections, (Ohio Form IT RE or SD RE).
- Ohio Department of Taxation, Tax Alert; May 26, 2021.
- Ohio announced the temporary COVID-19 withholding relief for Ohio city taxes under Ohio House Bill (HB) 197 will sunset on July 18, 2021. Once these provisions sunset, employers must withhold Ohio city income taxes from wages based on where their employees actually work, subject to a 20-day safe harbor in the existing Ohio municipal income tax withholding law. In March 2020, Ohio Gov. Mike DeWine issued Executive Order 2020-01D, declaring a state of emergency due to the COVID-19 pandemic and including orders for most employees to work from their homes rather than their pre-pandemic principal place of work. Ohio then passed HB 197, which temporarily allowed employers to continue withholding Ohio city income taxes based on the employees’ principal place of work, even though they were working from their homes. As Gov. DeWine has lifted EO 2020-01D and as provided in HB 197, the temporary withholding provision in Section 29 expires 30 days after the emergency declared in EO 2020-01D is lifted, which is July 18, 2021.
- Ohio Governor’s Announcement, June 18, 2021.
- Note that Ohio H.B. 110 would further extend this deadline to December 31, 2021.