Ohio Schedule of Credits (Nonrefundable)
Qualifying Retirement Income Included in Ohio AGI
To qualify for the Ohio Retirement Income credit, you must meet all of the following:
* Your adjusted gross income less exemptions (Ohio IT 1040, line 5) is less than $100,000; AND
* You received retirement benefits, annuities or distributions that were made from a pension, retirement or profit-sharing plan; AND
* You received this income because you have retired; AND
* This income is included in your adjusted gross income (AGI) on Ohio IT 1040, line 3.
Enter the total amount of retirement income – the credit will be calculated based on this amount. The maximum credit per return is $200. If you are filing a joint return, combine the total qualifying retirement income for both spouses to determine the credit.
**Note: Retirement buy-out amounts, attrition buy-out amounts and other similar amounts reported on federal form W-2 qualify for this credit only if the amounts are paid under a retirement plan.
Lump Sum Distribution Credit
To be eligible for this credit, your Ohio income tax base (Ohio IT 1040, line 5) must be less than $100,000. This credit is available only to individuals 65 or older before Jan. 1, 2017. If you received a lump sum distribution from a pension, retirement or profit-sharing plan, whether on account of retirement or separation from employment, and if you are 65 or older, you may be able to take advantage of a special tax treatment that uses the $50 senior citizen tax credit multiplied by your expected remaining life years.
If the answers to questions 1 through 6 below are all "Yes," you can claim the lump sum distribution credit. If you answer "No" to any of the questions, you do not qualify for this credit.
1. Were you 65 or older before Jan. 1, 2017?
2. Was the lump sum distributed from a qualified employee benefit plan (pension, profit-sharing, stock bonus, Keogh, Internal Revenue Code 401(k), STRS, PERS, SERS, etc.)?
3. Was the distribution made from all of the employer's qualified plans of one kind in which the employee had funds?
4. Was the distribution for the full amount credited to the employee?
5. Was the distribution paid within a single taxable year?
6. Was the distribution made because the employee died, quit, retired, or was laid off or fired?
If you take this credit, you cannot take the $50 senior citizen's credit on this year's return or on any future year return to which this taxpayer is a party. For more information, see Ohio LS WKS, page 2, which is available on our Web site at Ohio.gov.
**Note 1: Retirement buy-out amounts, attrition buy-out amounts and other similar amounts reported on federal W-2 do not qualify for this credit.
**Note 2: Distributions from university retirement plans and from government-sponsored deferred compensation plans do not qualify for this credit because these plans are not described in Internal Revenue Code section 401(a).
Lump Sum Retirement Credit
To be eligible for this credit, your Ohio income tax base (Ohio IT 1040, line 5) must be less than $100,000. Lump sum distributions that you received on account of retirement from a qualified retirement plan may qualify for the lump sum retirement credit. A lump sum distribution is one where you receive your entire balance from a qualified pension, retirement or profit-sharing plan during one taxable year.
If you take this credit, you cannot take the retirement income credit on this year's return or on any future year return to which this taxpayer is a party. For more information on lump sum distribution and lump sum retirement credits, see Ohio LS WKS, page 1, which is available on our Web site at tax.ohio.gov.
*Note 1: Retirement buy-out amounts, attrition buy-out amounts and other similar amounts reported on federal W-2 do not qualify for this credit.
*Note 2: Distributions from university retirement plans and from government-sponsored deferred compensation plans do not qualify for this credit because these plans are not described in Internal Revenue Code section 401(a).
Senior Citizen Credit
To be eligible for this credit, your Ohio income tax base (Ohio IT 1040, line 5) must be less than $100,000. You can claim a $50 credit if you were 65 or older before Jan. 1, 2017. If you are filing a joint return, only one credit of $50 is allowed even if you and your spouse are both 65 or older.
*Note: If you take or have previously taken the lump sum distribution credit, you cannot take the $50 senior citizen credit on this year's return or any future year's return.
Ohio Political Contributions Credit
You can claim a credit against your tax for monetary contributions you made during the year to the campaign committee of candidates for any of the following Ohio offices:
* Lieutenant governor
* Secretary of State
* Auditor of State
* Treasurer of State
* Attorney General
* Chief justice of the Ohio Supreme Court
* Justice of the Ohio Supreme Court
* Ohio Board of Education
* Ohio Senate
* Ohio House of Representative
The amount of the credit is the lesser of the combined total cash contributions you made during the year or $50 ($100 for married filing joint returns).
Displaced Worker Training Credit
Ohio law provides a $500 maximum credit per taxpayer for amounts you pay for qualified displaced worker training during the 12-month period after you lose your job. Qualified displaced worker training is job training or education that improves your ability to perform a new job after you have lost your previous job. Displaced worker training includes apprenticeships, internships and educational classes.
It does not include amounts paid for computer purchases or upgrades, professional organizational fees, meals, mileage, transportation or outplacement firms that help you to develop skills used to find a job - for example, career planning, profile analysis, skills assessment, resume writing, marketing action plan, etc. - that are paid in one's endeavor to find a new job. These training classes are not to improve the skills that one would use in performing the functions or tasks associated with a new job.
Please see Displace Worker Training Credit Worksheet on the Ohio Web site by clicking here.
Credit for New Employee in an Enterprise Zone
An employer that is complying with an enterprise zone agreement under R.C. 5709.62 and 5709.63 and that has not closed or reduced employment at any place of business in Ohio within the previous 12 months may apply to the director of the Ohio Development Services Agency for an "employee tax credit certificate" for each "eligible new employee," which the employer hires after June 30, 1994 at the facility to which the enterprise zone agreement applies.
An employer that receives a tax credit certificate for an eligible employee may claim a $1,000 nonrefundable credit for each taxable year covered under the enterprise zone agreement during which the employer employs the eligible new employee. If an eligible employee is employed for less than the employer’s full taxable year, the taxpayer’s credit is proportionately reduced. See R.C. 5709.66(B)(1).
An "eligible employee" is a new employee at the facility to which the enterprise zone agreement applies who at the time hired was a recipient of aid to dependent children or general assistance and who resided for at least one year in the county in which the facility is located. See R.C. 5709.66(B)(2)(a).
Important: Taxpayers who claim this credit should maintain for four years a supporting schedule that provides the following information for each eligible employee for which an employee tax credit certificate is received from the director of the Ohio Development Services Agency: (a) name of employee, (b) date hired (and date of termination of employment if applicable) and (c) amount of credit claimed. If a taxpayer claims the R.C. 5709.66 enterprise zone new employee tax credit with respect to an employee, the taxpayer may not claim the R.C. 122.17 new jobs refundable credit with respect to that employee. See R.C. 5709.66(B) (2)(b)(i) and 122.17(A).
Technology Investment Credit Carryforward
Effective Sept. 29, 2013, the technology investment tax credit for Ohio taxpayers who invest in certain research and development or technology-oriented businesses is no longer available. However, taxpayers who are currently carrying forward an excess credit amount from prior years may continue to do so until the amount is exhausted within the 15-year carry-forward period allowed by law.
Credit for Purchases of Grape Production Property
Grape producers may claim a credit equal to 10% of the cost of purchasing and installing or constructing qualifying property on or after Jan. 1, 1994. Qualifying property is any property, plant or equipment used in growing, harvesting or producing grapes in Ohio. The credit is subject to recapture if the taxpayer disposes of the property or ceases to use it as qualifying property within seven years after placing it in operation. The grape producer calculates the credit. If the producer is a pass-through entity, each investor in the pass-through entity may claim a proportionate share of the credit. Unused credit amounts may be carried forward for seven taxable years following the taxable year in which the credit is generated. After that time the unused portion of the credit expires.
Credit for Investing in an Ohio Small Business (InvestOhio)
InvestOhio provides a nonrefundable personal income tax credit to investors that infuse new equity (cash) into Ohio small businesses to acquire an ownership interest in the company. The small business is required to reinvest that infusion of cash into one of five categories of allowable expenses within six months of its receipt. The investor must retain his or her ownership interest for a two-year holding period before the tax credit may be claimed. The small business must similarly retain the property that it purchased from the cash infusion for the entire two-year holding period.
The Ohio Development Services Agency administers this program in collaboration with the Ohio Department of Taxation. For more information, click here.
Enterprise Zone Day Care and Training Credit
To claim the enterprise zone training or daycare credit, you must attach a copy of your Development Services Agency certificate, along with a statement showing the portion of the credit to which you are entitled. See Ohio Revised Code section 5709.65(C). These credits, to the extent they exceed your tax liability, can be carried forward to future taxable years until fully utilized.
Research and Development Credit
A nonrefundable credit is allowed equal to a borrower's research and development loan payments made during a calendar year that includes the last day of the taxable year for which the credit is claimed. The amount of the credit for a taxable year shall not exceed $150,000. No taxpayer is eligible to claim this credit unless they have obtained a certificate issued by the Ohio Development Services Agency and submits a copy with the tax return filing for that taxable year. The credit shall be claimed in the order required under Ohio Revised Code section 5747.98.
Ohio Nonrefundable Historic Preservation Credit
Include a copy of the certificate that you received from the Ohio Development Services Agency (ODSA). For additional information, visit the ODSA's Web site by clicking here or call 614-995-2292 or 1-800-848-1300.
Job Retention Credit (Nonrefundable Portion)
Administered by the Ohio Tax Credit Authority through the Ohio Development Services Agency, the nonrefundable portion of the job retention credit applies to “eligible businesses” that commit to a substantial capital investment project that will retain jobs in Ohio. In consideration of an eligible business’ commitment to acquire, construct, renovate or repair buildings, machinery or equipment, or conduct basic research and new product development at the Ohio project site, the authority will grant a tax credit equal to a percent of the Ohio income tax withheld from the taxpayer’s employees at the project site over the term of the credit.
An “eligible business” must apply to the authority for review and approval of the taxpayer’s proposed capital investment project. Following the authority’s approval of the taxpayer’s project, the eligible business and the authority can enter a tax credit agreement. While the particulars can vary from agreement to agreement, depending on the number of full-time equivalent employees at the project and the value of the project, the credit cannot exceed 75% of the tax withheld, and the credit term is limited to 15 years. The taxpayer must maintain operations at the project site for the greater of (a) the term of the credit plus three years, or (b) seven years.
For each taxable year for which the taxpayer claims the credit, the taxpayer is required to submit a copy of the Ohio Development Services Agency’s certificate of verification with the taxpayer’s tax report. However, failure to submit a copy of the certificate with the report does not invalidate a claim for the credit if the taxpayer submits a copy of the certificate to the commissioner within 60 days after the commissioner requests it.
A pass-through entity will generally claim this credit as a credit against the pass-through entity’s commercial activity tax (CAT) liability. Nevertheless, a pass-through entity can make an irrevocable election to pass the credit to its owners. If the pass-through entity makes the election, those owners that are individuals can claim their share of the credit against either their CAT liability on a standalone basis or against their Ohio individual income tax liability. See Ohio Revised Code sections 122.171(I) and 5747.058(B).
For additional information please contact the Ohio Development Services Agency’s Office of Grants and Tax Incentives at (614) 466-4551 or (800) 848-1300.
Ohio Adoption Credit
You can claim a credit against your tax if you adopted a minor child (under 18 years of age) during the taxable year. The amount of the credit for each minor child legally adopted by the taxpayer shall equal the greater of the following:
* The amount of expenses incurred by the taxpayer and the taxpayer's spouse to legally adopt the child, not to exceed $10,000 (ten-thousand dollars). For the purposes of this division, expenses incurred to legally adopt a child include expenses described in Ohio Revised Code section 3107.055, division (C).
This is a one-time credit per child. Any unused amounts can be carried forward for up to five years. The adoption must be final and recognizable under Ohio law in the year for which you first claim the credit. "Legally adopt" does not include the adoption of a minor child by the child's stepparent.
Joint Filing Credit
To qualify for this credit, you and your spouse must each have qualifying Ohio adjusted gross income of at least $500 after adjustments have been calculated using your Ohio Schedule A.
If you are a married couple filing a joint Ohio income tax return, you may qualify for a joint filing credit. You can take this credit only if each spouse has qualifying Ohio adjusted gross income of $500 or more. Qualifying Ohio adjusted gross income does not include income from Social Security benefits, most railroad retirement benefits, uniformed services retirement income, interest, dividend and capital gain distributions, royalties, rents, capital gains, and state or local income tax refunds. This credit is limited to a maximum of $650.
Our program will automatically calculate this credit based on your entries in the federal program.
Resident Credit (income subject to tax by other state)
Ohio offers a credit for taxes paid to another state on income that was taxed in both states. We will automatically calculate this credit for your Ohio Resident return if you have a Nonresident return created on your account. If the other state is a Part-Year return, you will need to enter the information manually within the TaxSlayer accoount if required.
Exception: Reciprocal States
Ohio has reciprocity agreements with Indiana, Kentucky, Michigan, Pennsylvania and West Virginia. Under this agreement, the income earned in these states for Wages and Salaries is taxable to Ohio and should be included on the Ohio return.
If your employer withheld income tax for the nonresident state, a nonresident return needs to be filed to claim a refund for the taxes paid. You cannot claim a refund on the resident return for the taxes paid.
Since the credit for taxes paid to another state is automatically calculated within the account when a resident and nonresident return are created, adjustments need to be made within the account to correctly calculate the reciprocal state returns. Visit our Knowledgebase for complete filing instructions for the resident and nonresident returns.
For additional information about the credits see Instruction Booklet for Ohio 1040.