Ohio Schedule of Credits
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.
Note: Uniformed services retirement income required to be shown on Ohio Schedule A, line 26 and Social Security and certain railroad retirement benefits required to be shown on Ohio Schedule A, line 15 DO NOT qualify for this credit.
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 adjusted gross income less exemption (Ohio IT 1040, line 5) must be less than $100,000. This credit is available only to individuals 65 or older before January 1, 2016. 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.
- Were you 65 or older before January 1, 2016?
- 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)?
- Was the distribution made from all of the employer’s qualified plans of one kind in which the employee had funds?
- Was the distribution for the full amount credited to the employee?
- Was the distribution paid within a single taxable year?
- Was the distribution made because the employee died, quit, retired, was laid off or was fired?
Note: 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 the Ohio Web site by clicking here
Note 1: Retirement buyout amounts, attrition buy-out amounts and other similar amounts reported on federal form W-2 do not qualify for this credit.
Note 2: Distribution 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 adjusted gross income less exemptions (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 the Ohio Web site by clicking here
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).
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
- 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).
Credit for Certified Ethanol Plant Investments
A taxpayer may claim a credit if the taxpayer invests in a certified ethanol plant. The investment must be made after Jan. 1, 2002 and before Dec. 31, 2012.
The amount of the credit is equal to 50% of the money the taxpayer invests in a certified ethanol plant up to a maximum of $5,000 per taxpayer per ethanol plant regardless of the number of years in which the taxpayer makes investments. The credit shall be claimed for the taxable year during which the investment was made.
"Ethanol" means the fermentation of ethyl alcohol from agricultural products, including potatoes, cereal, grains, cheese whey, sugar beets, forest products and other renewable resources that meet all of the specifications of the American Society for Testing and Material. Certified ethanol plant means a facility at which ethanol is produced and for which the Ohio Department of Agriculture has issued a certificate under R.C. 901.13.
If the investor is a pass-through entity, each equity investor in the pass-through entity may claim a proportionate share of the credit. The total credit for all years may not exceed the maximum limit of $5,000 per taxpayer per certified ethanol plant.
The Ohio Department of Agriculture administers this credit. To obtain additional information, please contact the Ohio Department of Agriculture, 8995 East Main Street, Reynoldsburg, OH 43068; general phone number: 614-466-2732; e-mail address: firstname.lastname@example.org
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 Credits
Employers who hold a Tax Incentive Qualification Certificate issued by the Ohio Development Services Agency and who reimburse "qualifying new employees" (defined below) for all or part of day-care services necessary to enable such employees to be employed at the enterprise zone facility to which the tax incentive qualification certificate applies, can claim a nonrefundable tax credit equal to the amount reimbursed. However, the credit is limited to a maximum of $300 for each child or dependent of the qualifying new employee receiving the day-care services. Only reimbursements of amounts that new employees pay to day-care centers licensed by the Ohio Department of Human Services for day-care services provided during the first 24 months of employment are eligible for this credit. The credit is available for the taxable year in which the reimbursement is made.
Important: Taxpayers claiming the day care credit should maintain for four years a supporting schedule that provides the following information for each qualifying new employee receiving reimbursement for day-care expenses:
- Name of employee
- Date hired
- Number of children or dependents receiving day-care services
- Amount reimbursed to employee.
For purposes of the enterprise zone day care credit and the enterprise zone training credit, R.C. 5709.64(A)(2) defines "qualifying new employees" as persons who at the time they were hired were one of the following:
- Unemployed persons residing for at least six months in the county in which the enterprise’s project site is located,
- "Job Training Partnership Act" eligible employees residing for at least six months in the county in which the enterprise’s project site is located,
- Recipients of aid to dependent children, general relief or unemployment compensation benefits who reside for at least six months in the county in which the enterprise’s project site is located,
- Handicapped persons as defined under R.C. 3304.11(A), residing for at least six months in the county in which the enterprise’s project site is located, or
- Residents for at least one year of an enterprise zone located in the county in which the enterprise’s facility is located.
The employer calculates the credit. If the employer is a pass-through entity, each equity investor in the pass-through entity may claim a proportionate share of the credit Credit amounts that are not used in the year generated can be carried forward to the next succeeding taxable year(s) until fully utilized.
Research and Development Credit
Beginning with taxable year 2003, 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 it has obtained a certificate issued by the director of 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 R.C. 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)
Enter the portion of Ohio adjusted gross income from Ohio IT 1040, line 3 that was not earned or received in Ohio. You must complete and include Ohio IT NRC (which is available on the Ohio Web site by clicking here) to calculate this credit unless your only income from Ohio sources were wages reported on your W-2(s) and you and/or your family members do not directly or indirectly own the business that paid you those wages.
Do not include on this line pass-through entity distributive shares of income allocated or apportioned to Ohio.
Note: Retirement buy-out amounts, attrition buy-out amounts and other similar amounts reported on your W-2(s) should not be included on this line to the extent that such amounts are based upon employment or previous employment within Ohio. Do not include on this line any severance pay, termination pay, final pay or "golden parachute" amounts if you (i) earned in Ohio any portion of such amounts and/or (ii) were employed in Ohio by the payor or the payor's affiliate prior to or at the time of your receipt of such amounts.
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:
- $1,500 (one-thousand five-hundred dollars);
- 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 step-parent.
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 (see the following examples).
Our program will automatically calculate this credit based on your entries in the federal program.
Resident Credit (taxes paid to another state)
If you were a full-year Ohio resident during 2015 and you had income subjected to tax by other states or the District of Columbia, you may qualify for the Ohio resident tax credit.
If you are filing your state returns through TaxSlayer, you generally do not have to enter any information for the credit to calculate.
- For any Resident return you file, your credit will automatically be calculated as long as the other state returns that you are filing are Nonresident returns. However, if any of your other state returns are Part-Year returns, and you wish to claim the credit for those states on your resident return, you will have to manually enter the information for the credit to calculate.
- Because this credit is uncommon on Nonresident and Part Year returns, if you are trying to claim it on either of these you will have to manually enter the information. TaxSlayer will NOT automatically calculate this credit on either of these types of returns because it is so rare.