Governor Kasich recently signed into law House Bill 58. This new law updates the version of the Internal Revenue Code that Ohio uses to include the end-of-the-year changes that the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 made to federal law.
Prior to this bill being passed, Ohio required taxpayers to add back a number of tax incentives that were extended by the Job Creation Act. Some of these provisions include the ability to take 100 percent bonus depreciation on certain assets placed in service in 2010 and above-the-line educator and tuition and fees deductions.
This law did not completely sync Ohio tax law to federal tax law – there are still differences in tax treatment between Ohio and federal returns. For example, Ohio still requires a 5/6th add back of bonus depreciation taken during the tax year. House Bill 58 allows you to start at the federal 100 percent bonus amount (if it applies to the asset) and then apply the 5/6th add-back rule. (Previously, Ohio required you to first add back 50 percent of the 100 percent bonus amount to Ohio income and then apply the 5/6th add back rule to the remaining 50 percent.)
If you had already filed your 2010 Ohio tax return, you can amend it to claim any deductions that changed as a result of House Bill 58. If you have been waiting to file your Ohio return until this issue was fixed, it is now safe to file your return.
If you are unsure how House Bill 58 will impact your situation, then now is the time to contact Rea & Associates. For additional information please contact Joseph Popp, JD at 614.889.8725, or click here to email Joseph. In a brief conversation he can assess your situation and determine how House Bill 58 will affect you.