Proposed Rules – Ohio Department of Taxation

On Friday, the Ohio Department of Taxation released several new rules and amendments to others that are used to administer the Ohio personal income tax laws.  These rules can be found here. The Department of Taxation has asked the public to electronically submit any comments by June 15, 2020 at [email protected].

Most of the amended rules have minor have cosmetic changes. Rule 5703-7-06 adds a requirement that a school district income tax number and district name be included in form IT 4 when the employee completes the form. The IT 4 is the state version of the W 4 used by the IRS. Rule 5703-7-08 clarifies what income qualifies for Ohio’s disability and survivor benefits deduction. Some of the changes add clarity, but subsection (D) of the rule appears to be new language.

Rules 5703-7-01 and 5703-7-03 are new. Rule 5703-7-01 arises from the changes made to the Business Income Deduction (BID) under the latest operating budget (House Bill 166). HB 166 required the inclusion of a North American Industry Classification System (NAICS) code for each business or professional activity from which income is included on form IT BUS (used to calculate the BID). The rule explains the NAICS information required and where to find NAICS information on the internet. Rule 5703-7-03 walks through the documentation required to support a taxpayer’s joint filing and/or residency tax credit. There is verbiage in the rule for both the nonresident and resident credit.