Deborah D Smith, Administrator Personal & School District Income Tax.

Deborah D Smith, Administrator

Personal & School District Income Tax

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)

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

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

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.

PIT Updates

Amended Electronic Payment Options ePayments Credit Card online & IVR

Masking SS#’s on Notices Billings & Assessments

PIT Updates (cont’d)

2010 Interest Rate 4% “Where’s My Refund” requirements

SSN, Birthdate & Tax type 1040 & SD Booklet population eMailer verbiage & population

Recently-Enacted Budget Bill

Amendments to Various Tax Credits

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

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.


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.

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.

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.


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

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



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



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

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.


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.


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


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.

Ohio e-file Mandate Getting Started

Step 1: Register for e-services at WWW.IRS.GOV

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.

Ohio e-file Mandate Approved Software Companies

Ohio e-file MandateOpt Out Request

Ohio e-file MandateTaxpayer Waiver Request


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.


Penalty Phase In

Year One-2009 taxable year, 2010 calendar year ODT to evaluate Preparer totals and communicate to

Preparer.


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


Penalty Phase In Year Three-2012 calendar year ODT to fully implement penalty Preparer will receive Billing letter prior to Assessment.

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

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

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

Personal & School District Income Tax

Questions?

Deborah D [email protected]

614-466-4592

Deborah D Smith, Administrator Personal & School District Income Tax.

Documents

Transcript of Deborah D Smith, Administrator Personal & School District Income Tax.