In light of the COVID-19 pandemic, nearly every state is offering tax return filing and payment deferrals. In addition, federal, state and local authorities are offering business and their employees numerous assistance measures, including employee retention and loan/financial assistance programs, among other programs.
In addition to the information below highlighting Ohio’s efforts, Cohen & Company has created an easy-to-use spreadsheet that outlines and tracks relief efforts identified in the states in which our firm is located. Learn more.
Ohio House Bill (HB) 197 offers Ohio individuals and businesses relief from tax filing and payments for the 2019 and 2020 tax years. The state is also offering additional financial assistance programs and job retention incentives.
Ohio Income Tax Filing and Payments Deferred
Relief: Ohio is deferring the tax deadline to July 15, 2020, similar to the federal extension of approximately three months from the original deadline of April 15, 2020. As with the IRS extension, Ohio will waive interest and penalty on tax due payments incurred as a result of the extension.
The 2020 first and second quarterly payments, normally scheduled for April 15 and June 15 for most taxpayers, have also both been extended to July 15, 2020.
Note the deadline of the CAT returns traditionally due May 10 have not been extended at this time.
Who this Impacts: All individuals and calendar year pass-through entities are eligible if they file the Ohio individual income tax, school district income tax or pass-through entity tax. The deferral also includes taxpayers that have opted in to have the commissioner administer the municipal net profit tax through the state’s centralized filing system. Individuals, estates, trusts and certain businesses making quarterly estimated income tax payments have also been granted additional time to file and pay without penalty or interest.
Municipality Income Tax Filing and Payments Deferred
Relief: Ohio has over 600 municipalities that impose a local individual income or business net profit tax. Over 500 of the 600-plus municipalities — including CCA, RITA, Akron, Canton, Columbus and Cincinnati — have published guidance that they will adhere to the same Ohio extended 2019 and 2020 income tax deadlines.
Who this Impacts: All individuals and calendar year businesses are eligible.
Occasional Entrant Rule During COVID-19 Pandemic Modified for Municipalities
Relief: HB 197 modified the occasional entrant rules to provide that employers do not consider the days employees work from home during the COVID-19 pandemic when determining whether an employee has exceeded the 20-day rule. As such, local income tax withholding should continue to be based on the employee’s principal place of work city, regardless of working from their residence during the pandemic. Employers will not be considered to have income tax nexus during the COVID-19 pandemic while impacted employees work from their homes.
Who this Impacts: All Ohio employers.
Ohio Bureau of Workers’ Compensation
Relief: Ohio is providing various relief opportunities to private and public employers. The BWC is automatically deferring unpaid insurance premium installment amounts due for March, April and May for the current policy year until June 1, 2020. PEO employers have received deferrals of March and April until June 1 at this time. The BWC will not cancel coverage or assess penalties for amounts not paid because of the COVID-19 pandemic.
Furthermore, the BWC anticipates issuing letters in May announcing a cut to all private employers’ 2020 estimated annual Premium by 20% for the policy year that begins July 1, 2020. Any 2020 installments will be based on each employer’s 2019 estimated annual premium to create installments. If you are an employer that was not impacted by COVID-19, you may consider reaching out to your service provider or the Ohio BWC to elect out of these automatic deferrals to avoid owing additional premiums upon the 2021 True-Up.
The BWC, at Governor DeWine’s request, is also considering issuing dividends equal to approximately 100% of the premiums employers paid in policy year 2018. BWC will apply the dividend to an employer’s outstanding balances first, including the recent installment deferrals. Any amounts exceeding outstanding balances will be sent to the employer similar to dividends in past periods.
Due to the changing economic conditions and BWC programs, it is important that all employers review their 2019 payroll amounts to confirm accuracy prior to the extended May 29 deadline to potentially reduce or eliminate any further 2019 installments.
Who this Impacts: All Ohio employers.
SharedWork Ohio
Relief: SharedWork Ohio provides an alternative to layoffs for employers. Ohio’s program allows workers to remain employed and employers to retain trained staff during times of reduced business activity. Under the plan, employers reduce employee hours to avert a layoff while the Ohio Department of Job and Family Services provides an unemployment insurance benefit proportionate to their reduced hours.
Upon approval, the affected employees may apply for SharedWork Ohio benefits.
Who this Impacts: All Ohio employers looking to retain employees while under economic stress.
Contact Hannah Prengler at hprengler@cohencpa.com or a member of your service team to discuss this topic further.
Cohen & Company is not rendering legal, accounting or other professional advice. Information contained in this post is considered accurate as of the date of publishing. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts, circumstances and current law.