On March 27, Governor DeWine signed a bill passed by the legislature to provide tax relief to Ohio taxpayers.
The law provides that taxpayers will have until July 15, 2020 (as opposed to April 15), to file and pay both any balance due on their 2019 income and school district taxes as well as the first and second estimated payments (April 15 and June 15) that is due. This extension is automatic and neither penalties nor interest will be assessed on these amounts. However, if you are a net profits filer for city tax purposes and your federal return was filed by March 16, 2020, the extension IS NOT automatic, and you must file an extension to receive additional time. Because city tax filing deadlines are tied to the State filing deadline, cities should not have to take any further action. Many cities in Ohio have already posted the extended filing date on their websites.
Withholding Changes for City Income Taxes
Also, part of the law is a change in the way employers calculate city income tax withholding. Employers are normally required to withhold city income taxes from wages for any municipality in which an employee spent 20 or more days working during a calendar year. This change provides that employees who are working from “a temporary location” (most notably their home) shall be treated as if they are working at their normal principal place of work. Thus, employers are able to withhold city taxes as if the employee were actually working in their normal location(s).
Commercial Activity Tax
Finally, the Tax Commissioner has been granted the authority to extend the due date for the filing of the Commercial Activity Tax (CAT) due on May 11, 2020. At the time of this release, no new extended date has been announced.
What It Is Not
There is no extension to file and/or pay sales tax. Of course, businesses that are closed due to any of the Orders issued by the State would, except for the month of March, only have a filing requirement as they would have made no taxable sales.
Some other states have released guidance as to relief that they are granting taxpayers. The most up-to-date information for this is available on the American Institute of Certified Public Accountants website.
For more information or questions, please contact Priscilla A. Grant, BMD Business, Corporate and Tax Member at firstname.lastname@example.org or 330.253.5934.