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    Ohio help

    My client resides in Michigan. He has a rental home in Ohio. This is the first year he had a profit - 2,662. My Drake program is showing that he owes no Ohio tax. He is 56 years old and is single, no kids. The rental profit is showing up as business income on schedule IT BUS. His Michigan income is 58,000. The program is giving him a business deduction equal to his income.

    Just for fun I increased the profit to 89,000 and he still owes no Ohio tax. What is wrong here.

    #2
    Ohio has an exclusion from OH income tax for business income up to $250K. However, rents are considered non-business income (see Sect. 5747.01(c) of the OH revenue code) as far as I can tell, so I am not sure why it is showing up on IT BUS. Check your input. I am not an expert on OH taxes, but there are OH preparers out there.

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      #3
      Schedule E income is allowed for the exclusion in Ohio. Had the same question when this credit was introduced. So I called the State. Was told as long as they "actively" participated in the everyday running of the rental property, it qualified. But if you read the stupid instructions it states rents are considered "non-qualifying". But the same instructions say "but not limited too". Anyway, it contradicted itself, so we made a call. Whether the State of Ohio rep new what they were talking about is a toss up. But we were told yes. Its your call.
      Last edited by Twin Turbo Z; 04-11-2017, 10:08 AM.

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        #4
        Apparently, he was correct. Google Ohio Business Deduction FAQ's and it is spelled out on their website.

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          #5
          Originally posted by Burke View Post
          Apparently, he was correct. Google Ohio Business Deduction FAQ's and it is spelled out on their website.
          Good to see they added a faq on the business credit. Hell of a credit !!! Keeps us from paying State income tax !!!

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