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For taxable year beginning in
2022
Ohio IT 1041
Fiduciary Income
Tax Return Instructions Rev. 12/22
Department of
hio Taxation
tax. hio.gov
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IT 1041
Rev. 12/22
Table of Contents
A H
Adjustments to Federal Income .............................................9-12 Highlights for 2022...................................................................... 2
Allocating Income ..................................................................... 13
Amended Returns....................................................................7-8 I
Apportionment Factor ..........................................................14-15 Interest & Penalties .................................................................... 9
IT NRCE ..............................................................................17-20
B
Beneficiary Schedule ................................................................ 16 M
Matching Allocation Based on Distributions ............................. 22
D Matching Expenses & Loss Amounts ....................................... 21
Due Dates................................................................................... 7
P
E Payment Options .....................................................................4-5
Entity Designation....................................................................... 8
Estate Credits ...................................................................... 11-12 R
Refundable Business Credits ..............................................15-16
F Refunds ...................................................................................... 9
Filing Tips ................................................................................... 3 Resident Credit Calculation (IT RCTE) ..................................... 16
G T
General Information .................................................................... 6 Tax Brackets ............................................................................... 9
Taxable Income .......................................................................... 9
Taxpayer Assistance ................................................................... 1
Online Resources
The Department of Taxation's website at tax.ohio.gov has many resources available to assist when filing the Ohio Pass-Through
Entity & Fiduciary income tax returns:
FAQs – Review answers to common questions on topics.
Forms – Find all pass-through entity & fiduciary income tax forms (including related schedules and worksheets). Many forms
have fill-in versions that can be completed online, print, and then submit to the Department.
Information Releases – Research detailed explanations and legal analyses of certain tax topics.
Ohio Virtual Tax Academy – View webinars designed and presented by Department staff on Ohio's state taxes.
Tax Alerts – Sign up to receive tax updates and reminders from the Department via email.
Federal Privacy Act Notice
Because we require you to provide us with a Social Security number, the Federal Privacy Act
of 1974 requires us to inform you that providing us your Social Security number is mandatory.
Ohio Revised Code 5703.05, 5703.057 and 5747.08 authorize us to request this information.
We need your Social Security number in order to administer this tax.
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IT 1041
Rev. 12/22
Taxpayer Assistance
Need Help? – To help answer questions and ensure that the tax returns are filed accurately, the Department of Taxation
provides the following resources at tax.ohio.gov:
Additionally, the website has all Pass-Through Entity & Fiduciary income tax forms to download or print. If the answer is
unavailable on the website, contact the Department using any of the following methods:
Email – Click 'Contact Us' at the top right on tax.ohio.gov and select
For persons who use text telephones
'Email Us' to access a secure email form, or email directly to Pass-
(TTYs) or adaptive telephone equip-
ThroughEntity@tax.state.oh.us. ment only: Contact the Ohio Relay Ser-
vice at 7-1-1 or 1-800-750-0750 and give
Call – To speak with an examiner at 1-888-405-4039 during the
the communication assistant the Ohio
Department's normal business hours.
Department of Taxation phone number
Normal business hours are from 8 a.m. to 5 p.m. Monday through that you wish to contact.
Friday excluding holidays.
Write – Contact the Department by mail at:
Ohio Department of Taxation
Pass-Through Entity & Fiduciary Income Tax Division
P.O. Box 2619
Columbus, OH 43216-2619
Note: Please use the street address listed below to overnight
documents to the Department.
4485 Northland Ridge Blvd.
Columbus, OH 43229-6596
Form Requests: Visit tax.ohio.gov to easily download our forms.
Request tax forms anytime by calling 1-800-282-1782.
These instructions contain law references for specific line items and requirements. To review Ohio Pass-Through Entity &
Fiduciary income tax law, see R.C. 5747 and R.C. 5733, respectively.
Go Paperless and File Electronically!
The IT 1041 can be filed electronically through the federal e-file program overseen by the IRS (irs.gov/filing), or through
a participating third-party tax preparation product. PTEs can verify their software is compatible with the MeF program by
reviewing the list of approved software vendors at PTE and Fiduciary Income Tax - Software Developers.
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IT 1041
Rev. 12/22
Highlights for 2022
Tax Bracket Update Schedule E Update (Nonrefundable Business Credits)
Beginning with tax year 2022, the tax brackets for fiduciary Schedule E has been updated to include the new Vocational Job
income tax have been indexed for inflation. The updated tax Credit (granted by ODE).
brackets can be found on page 9.
IT RCTE (Trust/Estate Resident Credit)
New Vocational Job Credit A new form to calculate the trust’s/estate’s resident credit.
This credit is granted by the Ohio Department of Education (ODE).
To claim the credit, attach a copy of the certificate from ODE that IT NRCE: Ohio Nonresident Credit for Estates
indicates the amount of the credit and the tax year for which the Estates must use the IT NRCE to calculate the nonresident portion
credit is awarded. For more information about the requirements for of their federal taxable income. The nonresident portion is used to
the credit, visit education.ohio.gov. calculate the Ohio nonresident credit. Include the IT NRCE form with
See R.C. 5747.057. the completed IT 1041 and retain a copy for the estate’s records. If
the tax preparation software allows for PDF attachments, include
IT K-1 a copy of the form. The IT NRCE form may be obtained in the
Each entity with Ohio income should prepare a separate IT K-1 for searchable Tax Forms section at tax.ohio.gov.
each investor, owner or qualifying beneficiary to enclose with the
investor’s, owner’s or beneficiary’s return. Electronic Filing
The IT 1041 can be filed electronically through the federal
For more information, see the IT K-1 form and instructions on tax. efile program overseen by the IRS (irs.gov/filing), or through a
ohio.gov in the searchable Tax Forms section. participating third-party tax preparation product. For a current list of
approved software programs, please see the Software Developers
Credit Carryforward page on the Ohio Department of Taxation website, and search for
Beginning with tax year that start on or after January 1, 2020 the most recent MeF Approval Status link.
the credit carryforward of overpayments has been reinstated,
however for tax years 2017-2019 the Department did not permit A tax return preparer that prepares more than 11 original tax returns
credit carryforwards. A credit carryforward is only allowed on a during any calendar year shall use electronic filing technology. This
timely filed, original return; otherwise, any overpayment will be provision does not apply to a tax return preparer in any calendar
refunded. year if, during the previous calendar year, the tax return preparer
Opportunity Zone Investment Credit Transfer Form prepared not more than 10 original tax returns.
A person that holds a wholly or partially unclaimed Ohio Opportunity
Zone Investment credit certificate may transfer the right to claim all See R.C. 5747.082
or part of the remaining credit to any other person. The Opportunity
Zone Investment Credit Transfer Form is available at tax.ohio.
gov. For more information about the credit, visit development.ohio.
gov or call ODOD at 1-800-848-1300.
See R.C. 122.84(E).
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IT 1041
Rev. 12/22
Filing Tips
Provide a Current Address
The Department uses the most up-to-date address on file to send correspondence, billings, assessments and refunds. If the address is
not correct, refunds and notices will be mailed to the incorrect address. To update an address, check the box above the address line on
the return or visit the Business Address Update page at tax.ohio.gov to change the address.
Verify the IT 1041 and UPCs are for the Correct Tax Year
The Department releases new forms and UPCs each tax year. Do not cross out the year at the top of the IT 1041 or UPC and write in a
new one, as doing so will delay the processing of the IT 1041 or UPC.
Maintain a Bank Account
The trust or estate must maintain its bank account to ensure it can receive refunds after its closing date. The Department cannot change
the name on a refund check, nor issue the check directly to a trustee or beneficiary, due to the closing or termination of a trust or estate.
Report FEIN or SSN in Correct Field
Do not enter an SSN in the FEIN field nor enter a FEIN in the SSN field.
Determine Residency of the Trust
A trust’s residency is determined under Ohio law using a series of tests; it is not determined based on the location of either the trustee or
the administration of the trust’s assets. Please note, it is possible that more than one residency test can apply to all or a portion of a trust.
See R.C. 5747.01(I)(3) and Information Release IT 2003-02 - Trust Residency.
Reprint Corrected Software-Generated Paper Returns
If the printed software-generated return from a tax preparation program subsequently requires changes on the return, do not write in
the changes. Use the software to make the necessary changes, save, and reprint the return. The Department’s system will not pick up
handwritten changes on returns generated by tax preparation software.
Complete All Applicable Schedules on the Return
When filing via a software program, complete all relevant schedules and do not override any line items. Information from schedules on
the return flows to other lines that are used to calculate the tax liability. If the schedules are not completed, a value of zero will flow to the
corresponding lines, which will override any amounts that may have been entered.
Report Trust income as Follows:
● Qualifying trust amounts on schedule VI (see page 13 for instructions);
● Apportioned modified business income and qualifying investment income on schedule VII (see page 13 for instructions);
● Allocated modified nonbusiness income on schedule VIII (see page 13 for instructions).
Trust income categorized incorrectly may result in a potential billing notice or refund reduction.
Report Apportionment Ratio and Ownership Percentage
Enter percentages and ratios in decimal format (e.g., report 30.09% as .3009). Report 100% as 1.0000. Enter apportionment ratios in
decimal format and carry to six decimal places. In addition, do not enter text (e.g., “null” or “zero”) in numeric fields.
Report Estimated Payments, Withholding, and Credits on Correct Lines
Incorrect reporting of the payments, withholdings, and credits may result in a denied/reduced refund or bill.
● Report estimated payments and withholding/overpayments previously claimed on Schedule XI – Net Payment Worksheet as
follows:
● Line 79a: Enter estimated payments made with an IT 1041 UPC or EFT payments made through the Ohio Treasurer of State
for this tax year;
● Line 79b: Enter 1099 withholding;
● Line 79c: Enter W-2 withholding;
● Line 79e: [Amended Return ONLY] Enter the refund amount from line 17 from the original return filed for this tax year.
● Report refundable business credits on Line 15 of Schedule 1 and on Schedule XII – Refundable Business Credits as follows:
● Line 81: Enter the Motion Picture/Broadway credit;
● Line 82: Enter the refundable portion of the Job Retention credit and the Job Creation credit;
● Line 83: Enter the Pass-Through Entity credit;
● Line 84: Enter the Venture Capital credit;
● Line 85: Enter the refundable portion of the Ohio Historic Preservation credit.
● Report nonrefundable business credits on Line 10 of Schedule 1 and on Schedule E. Include a copy of Schedule E, Schedule of
Nonrefundable Business Credits, and include copies of the required certificates and/or IT K-1s for verification.
● Do not use Schedule E to claim refundable credits. Instead, claim refundable credits on the appropriate “refundable credits” line.
Calculate the Resident Tax Credit on the Trust’s Modified Nonbusiness income
Include only the modified nonbusiness income in the calculation of the resident trust tax credit on Schedule IX. Failure to do so may result
in a denied/reduced refund or bill.
Report Proportionate Share of Credits
A distribution made by a trust/estate may affect the amount of a credit it is allowed to claim on its IT 1041. Credits must be shared between
the trust or estate and the beneficiaries in proportion to the income retained versus distributed. See R.C. 5747.02(C)(3).
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IT 1041
Rev. 12/22
Payment Options
First-Time Filers: Submit PTE Registration Form Before First Estimated Payment
If the trust or estate is a first-time filer, submit the Pass-Through Entity and Fiduciary Income Tax Registration Form before submitting
the first estimated payment. The form can be found on the tax.ohio.gov website in the Tax Forms search. Failure to submit the regis-
tration form may result in a delay in processing the estimated payment(s), resulting in a billing notice or refund delay.
Submit a Separate Check for Each Balance
A separate check is required for each tax return payment, estimated payment, billing/assessment payment, etc. The Department cannot
apply a single check to multiple balances. The check or money order should be made payable to “Ohio Treasurer of State” with identify-
ing information on the memo line, including:
● Federal employer identification number (FEIN), orSSN for decedent’s estate,only
● Tax form using the payment (IT 1041)
● Tax year end for the payment (mm-dd-yy)
Using Payment Coupons Created by Third-Party Software
Before submitting a payment coupon created by third party software, please verify the reporting period end date matches the software-
generated Key ID numbers and the number string at the bottom of the payment coupon, in the format MMYY. If mismatched, the pay-
ment will be misdirected, causing a delay in processing the estimated payment(s), resulting in a billing notice or refund delay.
Please contact the third-party software company’s support line to resolve.
Methods for Making PTE and Fiduciary Income Tax Payments
1. Electronic Funds Transfer (EFT): Payments may be remitted by EFT (ACH credit) via the Ohio Treasurer of State (TOS).
Any questions about the EFT payment process should be directed to the Ohio Treasurer of State by calling (877)338-6446.
This is an ACH credit option; the entity initiates the payment through its own bank. No online credit card payment or
ACH debit option exists at this time either through the Ohio Treasurer of State (TOS) or the Ohio Department
of Taxation.
Access the applicable tax form-specific link below for the information page with the TOS routing/account numbers and codes/
format the financial institution must use to issue the ACH credit via the TOS payment option:
IT 4708 Pass-Through Entity Composite Income Tax Payments
IT 1140 Pass-Through Entity and Trust Withholding Tax Payments
IT 1041 Fiduciary Income Tax (Trusts and Estates) Payments
IT 4738 Electing Pass-Through Entity Income Tax Payments instructions unavailable, as of publishing. Use IT 1140
payment instructions.
NOTE: The TOS no longer requires PTE and fiduciary filers to submit an EFT authorization form to register before making an
IT 4708, IT 4738, IT 1140 and/or IT 1041 payment via ACH credit (no ACH debit option).
2. Check or Money Order: Make check or money order payable to “Ohio Treasurer of State.” A payment made by a check or
money order must be submitted with the appropriate Ohio Universal Payment Coupon (UPC) based on the form filed. All UPCs
can be found on the tax.ohio.gov website in the searchable Tax Forms section by entering “UPC” in the Form Title or Number
field. Please mail the payment and UPC to the address on the UPC or hand deliver to our self-service walk-in center.
3. Electronic Check: When filing electronically through an approved software program, the PTE or fiduciary has the option to
make a payment by electronic check in the form of an Electronic Funds Withdrawal, or direct debit. The direct debit option is
only available for e-filed returns. For mailed returns created from an approved software program, the options for payment are
1) Electronic Funds Transfer (EFT), or 2) check or money order, as listed above.
For a current list of approved software programs, please see the Software Developers page on the Ohio Department of Taxa-
tion website, and search for the most recent MeF Approval Status link.
Please contact the software companies directly for their electronic payments support.
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IT 1041
Rev. 12/22
Payment Options Continued
Completing the Universal Payment Coupon (UPC)
Each payment made by check or money order must be submitted with the appropriate Ohio Universal Payment Coupon (UPC). Ap-
plication of payments is driven by the UPC used and is based on which form is filed (i.e., IT 1041, IT 4708, IT 4738, or IT 1140). Each
UPC allows the Taxpayer to make either an estimated payment (“ES” payment) or payment submitted with the tax return (“P” payment).
Only one type of payment can be made on each UPC submitted.
All UPCs can be found on the searchable Tax Forms page by entering “UPC” in the Form Title or Number field.
The IT 1041 UPC is used by trusts and estates to make either an estimated payment (IT 1041ES Trust or Estate) or a payment submit-
ted with the trust/estate return (IT 1041P Trust or Estate). When completing the UPC:
● Indicate the reporting period by providing the filing period start date and end date in the format mm-dd-yy;
● Specify the appropriate payment type (IT 1041ES Trust or Estate or IT 1041P Trust or Estate);
● Enter the entity type code in the box above the payment amount (*see codes on instructions page above UPC);
● Enter the amount of payment as a whole number without a decimal, as the UPC features a preprinted “.00”;
● A FEIN should be entered for a trust. The SSN field should only be used by the estate.
Sample IT 1041 UPC: This form must be included with each check or money order.
Include a Check or Money Order with each IT 1041 UPC
Payable to “Ohio Treasurer of State” with identifying information on the memo line, including:
● Federal employer identification number ( FEIN), orSSN for decedent’s estateonly
● Tax form using the payment (IT 1041)
● Tax year end for the payment (mm-dd-yy)
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IT 1041
Rev. 12/22
The trust or estate is not required to file the IT 1041 if the following
2022 Ohio Form IT 1041 three scenarios apply:
General Instructions ● The trust or estate’s federal 1041 or federal 1040NR shows no
taxable income or has a negative taxable income (e.g., simple
Who must file the IT 1041? trusts and most estate tax returns);
All estates and trusts, including foreign estates and trusts, that are ● The trust or estate did not earn or receive any Ohio sourced
subject to the Ohio fiduciary income tax must file the IT 1041 and income during the tax year; AND
pay any tax due. All estates are subject to tax on their Ohio taxable ● There are no Ohio adjustments that would result in Ohio
income, while all trusts are subject to tax on their modified Ohio taxable income.
taxable income. Generally, estates that file the federal 1041 and See R.C. 5747.02 and 5747.08.
reside in Ohio, or earn or receive income in Ohio, must file the IT
1041. Trusts that file the federal 1041 or the federal 1040NR and How does a federal §645 election impact the IT 1041?
have retained earnings and earn or receive income that is allocable An election under IRC §645 allows the executor of an estate and
or apportionable to Ohio, must file the IT 1041. the trustee of a revocable trust to elect to treat the trust as part of
the estate for federal tax purposes. The beneficiaries of an estate
Foreign estates and trusts are not necessarily exempt from Ohio that make a §645 election must use the federal taxable income as
income tax. Instead, Ohio levies its fiduciary income tax on every the starting point for completing the IT 1041. The estate must also
estate or trust residing in or earning or receiving income in Ohio. designate the same estate type(s) selected on the federal 1041.
“Trust” is specifically defined to include any trust described in IRC
§641- §685 that is not one of the following trusts: The estate may only claim deductions and credits available to an
estate on its IT 1041; it cannot claim any credits or deductions, and
● Grantor trusts should not check any boxes, available only to trusts. However, the
● Charitable remainder trusts beneficiary can claim any credits and withholding amounts belonging
● Retirement trusts to the trust identified in the §645 election.
● Pre-need funeral trusts Note: The estate must include a copy of the federal return when
● Qualified funeral trusts filing the IT 1041 as evidence of its §645 election.
● Endowment and perpetual care trusts
● Qualified settlement trust and funds What Trust Income is Subject to Tax?
● Retirement trust funds A trust is taxed on its “modified Ohio taxable income.” The modified
See R.C. 5747.02(A)(1) and (2), 5747.02(D), 5747.01(S), and Ohio taxable income is based on the trust’s federal taxable income,
5747.01(AA). subject to the adjustments on Schedule II of the IT 1041. After
determining its “modified Ohio taxable income” the trust must
How does the residency of the trust affect the taxation of the trust? determine which of the following types of income it is required to
A trust’s residency status only affects how its modified nonbusiness report:
income is taxed. A trust’s modified nonbusiness income is the portion ● Qualifying trust amount: Capital gains and losses from the
of the trust’s Ohio taxable income that is not included on schedules sale, exchange, or other disposition of equity or ownership
VI – Allocated Qualifying Trust Amounts and VII - Apportioned interests in, or debt obligations of, a qualifying investee to the
Income Amounts of the IT 1041. Some examples of modified extent included in the trust’s Ohio taxable income, but only if
nonbusiness income that are taxable to Ohio can be found under the the following requirements are satisfied:
section on this page labeled “What Trust Income is Subject to Tax?” ● The book value of the qualifying investee’s physical assets in
this state and everywhere as of the last day of the qualifying
Generally, most income reported by a trust is modified nonbusiness investee’s fiscal or calendar year ending immediately prior
income. A resident trust is required to pay Ohio income tax on all to the date on which the trust recognizes the gain or loss
modified nonbusiness income but may claim a resident credit on available to the trust.
Schedule IX of the IT 1041. The resident credit equals the lesser of ● The trust owns at least 5% of the qualifying investee during
modified nonbusiness income subjected to tax in another state, or the previous 10 years.
the amount of tax paid to another state on that income. ● Modified Business Income: Business income included in a
trust’s Ohio taxable income after such taxable income is first
Conversely, a nonresident trust is required to pay Ohio income tax reduced by the qualifying trust amount, if any.
on the items of modified nonbusiness income only to the extent ● Qualifying Investment Income: acquisition, ownership, or
they are from property that is located in Ohio or intangible property disposition of intangible property, loan fees, financing fees,
used in Ohio. Additionally, lottery winnings are taxable as modified consent fees, waiver fees, application fees, net management
nonbusiness income. fees, dividend income, interest income, net capital gains from
See R.C. 5747.01(AA)(3), (4)(c) and 5747.20(B). the sale or exchange of intangible property, or distributive
shares of income.
Is a trust that only has investment income required to file? ● Modified Nonbusiness Income: Is a portion of the trust’s Ohio
A resident trust investing only in savings accounts, certificates of taxable income other than the qualifying trust amount, and other
deposit, stocks, bonds, commercial paper and/or mutual funds will than the allocated qualifying trust amount, and apportioned
owe Ohio income tax if the trust had federal taxable income after income amounts; to the extent such qualifying investment
distributions. The tax on each resident trust is based on the trust’s income is not otherwise part of modified business income.
federal taxable income, plus or minus the adjustments set forth on Some examples of modified nonbusiness income that are
the IT 1041. taxable to Ohio include:
● Capital gains or losses from the sale, exchange or transfer
However, a nonresident trust investing only in savings accounts, of real or tangible personal property;
certificates of deposit, publicly traded stocks, bonds, commercial ● Rents and royalties from real or tangible personal property;
paper and/ or mutual funds will not owe any Ohio income tax. ● Royalties from patents or copyrights;
See R.C.5747.01(I)(3), 5747.01(S), 5747.01(AA)(3) and (4)(c) and ● Lottery winnings and gains and/or losses from the sale or
transfer of such winnings.
5747.20(B).
If the trust or estate has a loss is it still required to file an IT 1041? See R.C. 5747.01(AA) and 5747.02(A)(1).
The trust or estate may still have an IT 1041 filing requirement,
even if it reports a loss on the federal 1041 during the tax year, as
adjustments on Schedule II could result in Ohio taxable income.
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IT 1041
Rev. 12/22
How should a Qualified Pre-Income Tax Trust complete the IT 1041? Estimated Tax Payments
A trust that made the election to be a qualified pre-income tax trust The trust or estate must make estimated tax payments with the
is not subject to Ohio income tax. However, such a trust must file IT 1041ES Universal Payment Coupon (UPC) for the entity’s
the IT 1041, as follows, for informational purposes: taxable year If the trust or estate’s estimated tax liability after
● Include only pages 1 and 2 of the IT 1041; credits is greater than $500. The interest penalty applies to
● Check the “qualified pre-income tax trust” box at the top of estimated payments not timely made. For more information, see
page 1; page 9.
● Enter the trust’s federal taxable income on line 1; Due Dates for Estimated Tax Payments
● Deduct the amount entered on line 1 on line 2; If any filing due date set forth below falls on a weekend or on
● Enter zero on lines 3 and 13; AND a holiday, then the due date becomes the first business day
● Include a copy of the acknowledgment from the Department thereafter.
that the trust is exempt from Ohio income tax. % Cumulative Estimated Payments
See R.C. 5747.01(EE). Due Date for Estimated Payments Made
When is the Return Due? On or before the 15th day of the 4th
For all trusts and estates, the IT 1041, along with all supporting month of the taxable year. 22.5% of the current year tax liability
documentation such as IT K-1(s), W2s, 1099s and federal 1041 or
federal 1040NR, is due by the date listed in the table below. If any On or before the 15th day of the 6th 45% of the current year tax liability
filing due date set forth falls on a weekend or on a holiday, then the month of the taxable year.
due date becomes the first business day thereafter. On or before the 15th day of 9th 67.5% of the current year tax liability
month of the taxable year.
Filing Extensions
If the trust or estate has a 12/31/2022 calendar year end, the entity
can extend the due date for filing the IT 1041 to September 30, 2023, On or before the 15th day after the 90% of the current year tax liability
provided it qualifies for an IRS extension of time to file. Ohio does close of the taxable year
not have an extension request form but honors the IRS extension. Does Ohio Follow the Alternative Preparer Signature Procedures?
Include a copy of the IRS extension or IRS acknowledgement, and/ The Department follows the federal alternative preparer
or the extension confirmation number, if electronically filed. If the signature procedures found in federal Notice 2004-54; However,
trust or estate has a fiscal taxable year end, it will have a different
extension due date. See the table below for extension due dates. the paid preparer must print (not sign) his/her name if the
taxpayer authorizes the preparer to discuss the return with the
An extension of time to file does not extend the time for Department.
payment of the tax due. The trust or estate must make extension
payments with the required IT 1041 UPC available at the link Tax Preparers with a Preparer Tax Identification Number (PTIN) must
Forms, or by searching for “UPC” in the Form Title or Number field provide it on all returns.
on the TAX FORMS page at tax.ohio.gov. Interest will accrue on See R.C. 5703.262(B) and 5747.08(F).
any tax not paid by the due date, and penalties may also apply. If
the trust or estate has a fiscal year end, please see the table below. Can the Trust or Estate’s Tax Preparer Contact the
Interest will accrue on any unpaid tax, and penalties may also apply. Department About the Tax Return?
See table below. The fiduciary of the estate or trust can check the box above the
tax preparer’s name on page 2 of the return to authorize the
Table 1: TY 2022 Due Dates and Extended Due Dates preparer to:
Fiscal Year IRS Due Ohio Due IRS Ext. Due Ohio Ext. Due ● Contact the Department about the status of the trust or
Ends Date Date Date Date estate’s return, payments, or refund;
12/31/22 4/18/23 4/18/23 10/02/23 10/02/23 ● Provide the Department with information missing from the
trust or estate’s return; AND
1/31/23 5/15/23 4/15/24 10/31/23 4/15/24 ● Respond to inquiries or notices from the Department related
to the return.
2/28/23 6/15/23 4/15/24 11/30/23 4/15/24
See R.C. 5747.08(J).
3/31/23 7/17/23 4/15/24 01/02/24 4/15/24
What is the IT K-1?
4/30/23 8/15/23 4/15/24 1/31/24 4/15/24 The IT K-1 allows the trust or estate to report its income,
adjustments, credits, and apportionment information to its
5/31/23 9/15/23 4/15/24 2/29/24 4/15/24 beneficiaries. The information is used by the trust or estate’s
beneficiaries when completing the IT 1040, IT 1041, IT 4708, or
6/30/23 10/16/23 4/15/24 4/01/24 4/15/24 IT 4738.
7/31/23 11/15/23 4/15/24 4/30/24 4/30/24 The trust or estate must complete two copies of the IT K-1 for
each beneficiary whose income is included on the IT 1041. One
8/31/23 12/15/23 4/15/24 5/31/24 5/31/24 copy of the IT K-1 must be included when filing the IT 1041. The
other copy should be provided to the beneficiary.
9/30/23 1/16/24 4/15/24 7/01/24 7/01/24
The IT K-1 is available in the searchable Tax Forms section at
10/31/23 2/15/24 4/15/24 7/31/24 7/31/24 tax.ohio.gov. For additional information, please see the IT K-1
category in the PTE FAQs at tax.ohio.gov.
11/30/23 3/15/24 4/15/24 9/03/24 9/03/24
Amended Returns
See R.C. 5747.08(G) and Ohio Admin Code 5703-07-05. The fiscal
year ends referenced in the above table may or may not reflect a When to Amend
12-month filing period. The trust or estate can file an amended IT 1041 to report changes
to the originally filed return. An amended return can result in
either a tax due or a refund based on the changes. Under certain
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IT 1041
Rev. 12/22
circumstances, an amended return may be required. To amend File Prior to Out of Statute
the IT 1041 the trust or estate should file a new return showing the Ohio’s fiduciary income taxes generally have a four-year statute of
original amounts for any item that remains unchanged and reflecting limitations. The Department has four years to issue an assessment
all proposed changes; indicate that it is amended by checking the from the later of when the return was due or filed. The PTE or
box at the top of page 1. fiduciary has four years from the date of the payment to request a
refund. Please see the table below for details.
Please include a copy of the following with the amended return:
● Any canceled checks used as payment on the originally filed Tax Year Due Date Timely Payment or Withholding Out-of-Statute Date
return; AND 2018 4/15/19 4/18/23
● Supporting documentation that reflects the reason(s) for filing the
amended return. 2019 7/15/20 7/15/24
Note: It may take at least 180 days from the date of receipt to 2020 5/17/21 5/15/25
process the amended return. 2021 4/18/22 4/15/26
For additional information, see tax.ohio.gov for FAQs.
2022 4/18/23 4/15/27
When not to amend the return
Some common mistakes may not require an amended return. Some Completing the Applicable
examples include: Check Boxes on Page 1 of the Ohio IT 1041
● Math errors;
● Missing pages or schedules; On page 1 of the return, the entity must designate whether it is
● Demographic errors; OR an estate or a trust. Trust and estate types (other than resident,
● Missing income statements (W-2, 1099, K-1) or credit certificates. nonresident, irrevocable or testamentary) are determined by the
federal 1041 filing.
In these situations, the department will either make the corrections
to the return or contact the trust or estate to request the needed Estates must select one or both of the following:
documentation.
● Decedent’s estate
Requesting a refund ● Bankruptcy estate
The trust or estate may want to amend the return to request an
additional credit, deduction or payment. Such changes may result Trusts must select one or the other of each of the following:
in a refund. The trust or estate has four years from the date of ● Simple or complex
the payment to request a refund. The trust or estate must include ● Resident or nonresident
supporting documentation to substantiate the changes reported
on the amended return. Some common required documentation Note: If applicable, the trust should also select one or more of the
includes: following:
● The federal return, including applicable schedules and ● Irrevocable
attachments; ● Testamentary
● Copies of income statements (W-2, 1099, etc.);
● IT K-1, or credit certificates from DSA; Trust Residency
● Form IT NRCE. A “resident” trust is a trust that in whole or in part resides in Ohio. If
the resident trust resides in part, it is only a resident with respect to
Reporting additional tax due that part. See R.C. 5747.01(I)(3) and information release IT 2003-02.
The trust or estate should amend the return to report additional
income or reduce a previously claimed credit or deduction. A trust created at the time of an individual’s death under a will
Such changes may result in additional tax due. Payment should (testamentary) is a testamentary trust. A testamentary trust resides
be included with the amended return using an IT 1041 UPC in Ohio if the decedent at the time of death was domiciled in Ohio
payment coupon. for Ohio estate tax purposes (R.C. 5731).
Changes to the federal return An irrevocable trust resides in Ohio if (i) at least one “qualifying
If the IRS makes changes to the federal return, either based on beneficiary” (R.C. 5747.01(I)(3)(c)) is domiciled in Ohio for all or
an audit or an amended return, and those changes affect the Ohio a portion of the trust’s taxable year and (ii) at any time the trust
return, the trust or estate is required to file an amended IT 1041. received assets from one or more of the following:
Do not file the amended Ohio return until the IRS has finalized
the changes to the federal return. Once the changes are finalized, ● An individual who was domiciled in Ohio for income tax
purposes at the time he/she transferred assets to the trust; OR
please include a copy of all of the following: ● An individual who was domiciled in Ohio for income tax
● The federal amended 1041; purposes at the time the trust document became irrevocable
● The IRS acceptance letter; OR even if the individual was not domiciled in Ohio at the time he/
● The refund check issued to the trust or estate by the IRS, if she transferred the assets to the trust; OR
applicable ● An estate of an individual who at the time of death was
domiciled in Ohio for estate tax purposes; OR
Note: Instead of including a copy of these documents, the trust ● An insurance company, pension plan or court award on account
or estate may be able to submit a copy of the IRS Tax Account of the death of an individual, and at the time of the individual’s
Transcript reflecting the updated federal return information. death either (i) the individual was domiciled in Ohio for estate
tax purposes or (ii) the owner of the insurance policy was
The amended IT 1041 should be filed no later than 90 days after domiciled in Ohio for income tax purposes.
the IRS completes its review of the federal return. Failure to file ● Note: The list above is not all-inclusive. For additional
the return within this time period may result in an assessment or a information, see R.C. 5747.01(I)(3)(a),(e) and (f).
denial of the refund claim.
The 90 days begins to run when: Estate Residency
An estate is a resident if the decedent was domiciled in Ohio at
● The period for the federal appeal has expired; the time of death. See R.C.5747.01(I)(2).
● The date on the refund issued by the IRS; OR
● The date a federal settlement agreement is signed.
See R.C. 5747.10.
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Schedule I – Taxable Income, Tax, Payments and Net Line 15 – Refundable Business Credits
Amount Due Calculations This line must match line 87, the sum of all refundable business
Line 4 – Trusts- Allocated Qualifying Amount credits. Any difference on these lines will result in a delay in
processing the return and a possible refund reduction or billing.
This line must match the summary line 61. Any difference on
these lines will result in a delay in processing the return and a Line 18 – Amount of Line 17 to be Credited Toward Next Year’s
possible refund reduction or billing. Liability
Line 5 – Trusts - Apportioned Income Beginning with filing periods that start on or after January 1, 2020 the
credit carryforward of overpayments has been reinstated, however
This line must match the summary line 64. Any difference on for tax years 2017-2019 the Department did not permit credit
these lines will result in a delay in processing the return and a carryforwards. A credit carryforward is only allowed on a timely
possible refund reduction or billing. filed, original return; otherwise, any overpayment will be refunded.
Line 6 – Trusts - Modified Nonbusiness Income Line 19 – Amount of Line 17 to be Refunded
This line must match the summary line 67. Any difference on Interest on Overpayments. Once the return has been verified,
these lines will result in a delay in processing the return and a if the refund exceeds one dollar it will be refunded to the trust or
possible refund reduction or billing. estate. The trust or estate will receive interest on the refund from
the date of payment until the date of the refund if the amount is not
Line 8 – Tax on Ohio Taxable Income (Estates) or Modified refunded within 90 days of the later of the return’s due date, or the
Ohio Taxable Income (Trusts) date the return was filed.
Use Table 2 to compute the tax based upon the amount on line 3
During the calendar year 2023, the interest rate is 5%.
for estates or line 7 for trusts.
Table 2: TY 2022 Estates and Trusts Income Tax Brackets See R.C. 5747.11(B) and (C)(1).
and Marginal Tax Rates
TY 2022 Ohio Taxable Line 21 – Interest Due on Late Payment of Tax
more thanIncome Bracketsnot more than TY 2022 Ohio Tax Interest is due on any unpaid tax exceeding one dollar from the
unextended due date until the date the tax is paid. An extension of
$ 0 – $ 26,050 1.38462% of Ohio taxable income time to file does not extend the payment due date. The interest rate
$ 26,050 – $ 46,100 $ 360.69 plus2.765% of excess over $ 26,050 for calendar year 2023 is 5%.
$ 46,100 – $ 92,150 $ 915.07 plus3.226% of excess over $ 46,100 See R.C. 5747.08(G).
$ 92,150 – $ 115,300 $2,400.64 plus3.688% of excess over $ 92,150 Line 22 – Total Amount Due if any
More than $ 115,300 $3,254.41 plus3.990% of excess over $ 115,300 Make payments by:
See R.C. 5747.02(A) ● Electronic check through an approved software program when
filing electronically;
Line 10 – Credits from Schedules IV, V, IX and E ● Sending a personal check/money order with the Ohio UPC;
● Electronic funds transfer (EFT) through the Ohio Treasurer
● Estates should enter the sum of lines 55 and 58 of the IT 1041 of State.
and line 11 of the Ohio Schedule E.
● Trusts should enter the sum of lines 74 of the IT 1041 and line For questions regarding the EFT payment program, see the
11 of the Ohio Schedule E. Electronic Funds Transfer Via Ohio Treasurer of State (TOS) at
● Schedule E, Nonrefundable Business Credits is available in the Business Tax - Pay on our website at tax.ohio.gov. Online
searchable Tax Forms section of tax.ohio.gov.
If $1.00 or less is owed, no payment is necessary.
Note: The trust/estate is only entitled to the portion of the credits
that relate to the retained earnings in the trust/estate. Schedule II – Adjustments to Federal
See R.C. 5747.02(C)(3) Taxable Income
Line 12 – Interest Penalty on Underpayment of Estimated Tax Additions
● A trust or estate that does not make timely, sufficient estimated The following apply to both trusts and estates except where noted.
payments may be subject to the 2210 interest penalty. A trust or
estate filing the IT 1041 should use pages 1 and 2 of the Ohio IT/ Line 23 – Federal and/or Non-Ohio State or Local
SD 2210 to determine if an interest penalty is due, and if so the Government Interest and Dividends Not Distributed
interest penalty amount. This form is available in the searchable Enter the following:
Tax Forms section of tax.ohio.gov. ● Interest and/or dividends paid on obligations or securities from
a non-Ohio state; AND/OR
● Interest and/or dividends paid on obligations or securities from
The trust or estate will owe an interest penalty if (i) the Ohio tax due a non-Ohio local government.
is greater than $500 and (ii) withholdings, timely estimated payments
and refundable credits are less than either of the following: Do not include:
● Any amounts already included in federal taxable income;
● 90% of the 2022 Ohio tax liability OR ● Interest and/or dividends paid on obligations or securities from
● 100% of the 2021 Ohio tax liability Ohio;
● Interest and/or dividends paid on obligations or securities from
Note: A trust or estate may be subject to the penalty even if it is an Ohio local government; AND
due a refund when filing its return. ● Interest and/or dividends paid on obligations or securities from
a U.S. territory.
See R.C. 5747.09(D) and (E). See R.C. 5747.01(S)(1) and (2).
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Line 24 – Pass-Through Entity Taxes Paid/Electing Pass- Source of Add-back §168(k) Add-back Add-back
Through Entity Taxes Paid Depreciation Amount (§179- Ratio Amount
25,000)
Enter the proportionate share of tax paid by a pass-through entity PTE A - $100,000 5/6 $83,333
on the IT 1140 or an electing pass-through entity on the IT 4738 to operations
the extent not included in computing taxable income or Ohio taxable PTE B -
income. These taxes may be reported to the trust/estate on an IT distributive share/ $80,000 5/6 $66,667
bonus expense
K-1 or provided with the federal K-1. See R.C. 5747.01(S)(11) and
R.C. 5747.01(S)(15). Total add-back $100,000 $80,000 $150,000
for tax year:
Line 25 – Electing Small Business Trust (ESBT) Income Example 2: A trust owns PTE A and PTE A owns PTE B. PTE A
Add the distributive share of income from an S corporation. This has $180,000 subject to add-back for the current tax year. $100,000
amount is apportionable business income and must be included on is §179 depreciation from PTE A’s business operations. $80,000
Schedule VII. Do not include on Schedule VIII. is 168(k) depreciation from its distributive share of bonus expense
from PTE B. PTE B increased its Ohio employer withholding for
Note: Such income is not included in the trust’s federal taxable its employees by at least 10% over the previous tax year. The add
income. back ratios will be the same for PTE A and PTE B since the Trust
is the taxpayer.
See R.C. 5747.01(S)(13).
Add-Back – Combined add-back
Line 26 – Losses from the Sale or Disposition of Ohio Public Source of Add-back §168(k) Add-back Add-back
Obligations Depreciation Amount Ratio Amount
(§179-
Enter any loss resulting from the sale/disposition of Ohio public 25,000)
obligations to the extent that such losses have been deducted in PTE A - $100,000 5/6 $83,333
determining federal taxable income. operations
See R.C. 5747.01(S)(7) and 5709.76. PTE B -
distributive share/ $80,000 5/6 $53,333
Line 27 – Reimbursement of Expenses bonus expense
Total add-back $100,000 $80,000 $136,666
Enter reimbursements received in 2022 for any expenses that the for tax year:
trust/estate deducted on a previously filed Ohio fiduciary income
tax return if the amount of the reimbursement was not included in Example 3: A trust owns PTE A and PTE A owns PTE B. PTE A
federal taxable income. has $180,000 subject to add-back for the current tax year. $100,000
is §179 depreciation from PTE A’s business operations. $80,000
See R.C. 5747.01(S)(9)(b). is 168(k) depreciation from its distributive share of bonus expense
from PTE B. The trust’s federal taxable income is ($100,000). The
Line 28 – IRC §168(k) bonus depreciation and §179 expense trust would calculate its depreciation add-back as follows:
add-back Add-Back – NOL
Check the box for the appropriate add-back ratio. Source of Add-back §168(k) Add-back Add-back
Income Amount Ratio Amount
Add 5/6 of Internal Revenue Code (IRC) §168(k) bonus depreciation (§179-
allowed under the IRC Code. Also, add 5/6 of any qualifying §179 25,000)
depreciation expense. However: PTE A - $100,000 6/6 $100,000
operations
● Replace “5/6” with “2/3” for employers who increase their Ohio
income taxes withholding by an amount equal to or greater than PTE B -
distributive share/ $80,000 6/6 $80,000
10 percent over the previous year; OR bonus expense
● Replace “5/6” with “6/6” for taxpayers who incur a net operating
loss (NOL) for federal income tax purposes if the loss was a direct/ Total add-back $100,000 $80,000 $180,000
for tax year:
indirect result of the §168(k) and/or §179 depreciation expenses.
Put the total year add-back amount on line 53 of Schedule IV.
If the amount of qualifying §179 depreciation expense is greater
than $200,000, the $25,000 deduction is reduced dollar for dollar To the extent this amount is apportionable, it should
for any amount over $200,000 per the IRC as it existed as of be included on Schedule VII. If the amount is
December 31, 2002. ! apportionable, do not include on Schedule VIII.
CAUTION
Using the following lines from federal form 4562, the add-back
formula is (line 12 - $25,000) + line 14 + line 25. The sum of these For additional information, please see the PTE Bonus Depreciation
lines is multiplied by the appropriate ratio. FAQs at tax.ohio.gov and R.C. 5747.01(S)(14) and (A)(17).
Additionally, there is no requirement to make Ohio’s depreciation Line 29 – Personal Exemption (Estates Only)
add-back in either of the following circumstances:
● The depreciation is from a PTE, and the investor owns less than Enter the amount of the personal exemption allowed to the estate
5% of the PTE. This is true even if the PTE performed the add- pursuant to I.R.C. 642(b). See R.C.5747.01(S)(3).
back on its Ohio filing (i.e. the IT 1140, IT 4708 or IT 4738); OR
● A PTE who increases their Ohio income taxes withheld over the Federal Conformity Adjustments (Estates and Trusts). Line 29 is
previous year’s by an amount greater than or equal to the sum also for federal conformity adjustments, however, the trust/estate
of §168(k) and/or §179 depreciation amounts. must make all other required adjustments for this line.
Example 1: A trust owns PTE A and PTE A owns PTE B. PTE A For more information, see Ohio Conformity Updates at tax.ohio.gov.
has $180,000 subject to add-back for the current tax year. $100,000
is §179 depreciation from PTE A’s business operations. $80,000 Line 30 – Expenses Claimed on Ohio Estate Return
is 168(k)depreciation from its distributive share of bonus expense This line is no longer applicable. Enter -0- on this line. See R.C.
from PTE B. 5747.01(S)(8).
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IT 1041
Rev. 12/22
Deductions Line 38 – Farm Income (Trusts Only)
The following apply to both trusts and estates except where noted. Deduct any amount that a trust was required to report as farm
Deduct the income items described below only to the extent that income on its federal 1041 tax return but only if the assets of the
these amounts have not already been deducted or excluded from trust directly or indirectly include at least 10 acres of land.
federal taxable income.
See R.C. 5747.01(S)(12) and 5713.30.
Line 32 – Federal Interest and Dividends Exempt from State
Taxation Line 39 – IRC §168(k) bonus depreciation and §179 expense
add-backs
Enter interest and dividend income, to the extent included in federal
taxable income, from obligations issued by the United States Use the table on line 89 to calculate the current deductions from
government or its possessions/territories that are exempt from Ohio the prior year add-back amounts. Deduct:
tax by federal law. ● 1/5 of prior year 5/6 add-backs,
A comprehensive list of deductible interest and dividends can be ● 1/2 of prior year 2/3 add-backs, AND/OR
found in Information Release IT 1992-01 – Exempt Federal ● 1/6 of prior year 6/6 add-backs,
Interest Income.
of applicable §168(k) bonus depreciation and §179 expense add-
Examples of interest income that are not deductible: backs on a prior year’s IT 1041. The deduction must be taken
● Interest paid by the IRS on a federal income tax refund. in equal increments in consecutive tax years. If the deduction is
● Interest income from Fannie Maes or Ginnie Maes. missed in a taxable year, any unused portion from any given tax
year is not eligible to be carried forward. Instead, the PTE would
See R.C. 5747.01(S)(4). have to amend the prior years’ returns to claim the deduction.
Line 33 – State and Municipal Income Tax Refunds To the extent this amount is apportionable, it should
be included on Schedule VII. If the amount is
Enter the amount of state and/or municipal income tax refunds ! apportionable, do not include on Schedule VIII.
included in federal taxable income for the taxable year of this CAUTION
return if the refunds relate to taxes previously claimed as itemized
deductions on the decedent’s federal income tax return. Deduct only amounts that were added back by the trust/estate on
See R.C. 5747.01(S)(9)(a). a prior year’s IT 1041. This deduction is available even if the asset
is no longer owned by the trust/estate.
Line 34 – Losses from an ESBT
See R.C. 5747.01(S)(14) and (A)(18).
Deduct the distributive share of loss from an S corporation if the
loss has not been directly or indirectly deducted in computing the Line 40 – Repayment of Income Reported in a Prior Year
trust’s federal taxable income
Deduct amounts, described in section 1341(a)(2) of the Internal
This amount is apportionable business income and Revenue Code, that the trust/estate repaid in the current tax year
must be included on Schedule VII. Do not include that was received and included in federal taxable income in a
! on Schedule VIII. prior year if:
CAUTION ● The trust/estate recognized the amount as income on the federal
return in a prior year;
Line 35 – Wage and Salary Expense Not Previously Deducted ● The trust/estate has not deducted this income on any other line
on the Ohio income tax return for any tax year; AND
Deduct the amount reported as work opportunity tax credit on the ● In the year the trust/estate recognized the income, it did not
federal income tax return. qualify for either the Ohio resident or nonresident credit.
See R.C. 5747.01(S)(5). See R.C. 5747.01(S)(10).
Line 36 – Interest/Gains from Ohio Public Obligations Schedule III – Estate Credits
Deduct interest income earned from Ohio public obligations and The credits listed on Schedule III are only available to an estate.
Ohio purchase obligations if the interest income was included in the They correspond to the credits found on Ohio’s individual income
federal taxable income. The trust/estate can also deduct any gains tax return (IT 1040).
resulting from the sale or disposition of Ohio public obligations to
the extent that the gain was included in the federal taxable income. Distribution of Credits. When calculating estate credits, do not
include any credit amounts that are allocable to a beneficiary. This
The trust/estate can also deduct income from a certain transfer includes credits based on income that is distributed to a beneficiary
agreement or an enterprise transferred under that agreement if instead of being retained by the estate.
the income was included in the federal taxable income. See R.C.
5747.01(S)(6), 5747.01(S)(7) and 5709.76. See R.C. 5747.01(S)(13).
Line 37 – Refund or Reimbursements of a Prior Year Deduction Line 43 – Retirement Income Credit
Deduct amounts included in the federal taxable income that To qualify for this credit, all of the following must be true:
represent refunds or reimbursements of expenses that were ● The decedent must have received retirement income from a
previously deducted on the federal 1041 return. Do not include any pension, profit sharing or retirement plan (such as traditional
amounts shown on line 31. See R.C. 5747.01(S)(9)(a). IRAs, 401(k) plans);
● This income is included in the estate’s federal taxable income
Federal Conformity Adjustments. Line 37 is also for federal (e.g. it was not distributed to any beneficiary);
conformity adjustments, however, the trust/estate must make all ● This income was received on account of the decedent’s
other required adjustments for this line. retirement; AND
● The decedent has not previously taken the Ohio lump sum
For more information, see Ohio Conformity Updates at tax.ohio. retirement credit.
gov.
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Rev. 12/22
Credit Amount Line 48 - Campaign Contribution Credit for Ohio Statewide
Office or General Assembly
Retirement
Retirement income included in Estates’ taxable income An estate may claim this credit if the estate contributed money to
Income Credit
the campaign committee of a candidate for any of the following
$ 0 – $ 500 0 Ohio offices:
$ 501 – $ 1,500 $ 25 ● Governor / Lieutenant governor
● Secretary of state
$ 1,501 – $ 3,000 $ 50 ● Auditor of state
● Treasurer of state
$ 3,001 – $ 5,000 $ 80 ● Attorney general
$ 5,001 – $ 8,000 $ 130 ● Chief justice of the Ohio Supreme Court
● Justice of the Ohio Supreme Court
$ 8,001 or more $ 200 ● Ohio Board of Education
The credit is based on the total retirement income included the ● Ohio Senate
estate’s taxable income. ● Ohio House of Representatives
The maximum credit per return is $200. The credit equals the amount contributed during the tax year up to
$50 per return. Contributions to local candidates (such as city or
See R.C. 5747.055(B). county officials) or federal candidates (such as President or U.S.
Senator) do not qualify for this credit.
Line 44 – Lump Sum Retirement Credit
If the estate takes this credit, it cannot take the retirement 48a – Scholarship Donation Credit
Note:
income credit on this year’s return or any future return. To qualify for this credit, the estate must make a monetary donation
To qualify for this credit, all of the following must be true: to an eligible scholarship granting organization (SGO). The credit
● The decedent must have received a total lump sum distribution equals the lesser of $750 or the total amount you donated to SGOs
on account of retirement; during the tax year. For a list of eligible SGOs, see tax.ohio.gov/
● The distribution must have come from a qualified pension, SGO. See also R.C. 5747.73
retirement or profit sharing plan;
● This income was included in the estate’s federal taxable income Line 49 – Vocational job credit and/or Ohio adoption credit
(e.g. it was not distributed to any beneficiary); AND (adoption credit limit $10,000)
● The decedent has not previously claimed this credit. This Vocational Job Credit is granted by the Ohio Department of
Use the Lump Sum Worksheet on page 23 to calculate this credit. Education (ODE). To claim the credit, attach a copy of the certificate
from ODE that indicates the amount of the credit and the tax year
See R.C. 5747.055(C). for which the credit is awarded. For more information about the
requirements for the credit, visit education.ohio.gov.
Line 45 – Senior Citizen’s Credit
See R.C. 5747.057.
To qualify for this credit, both of the following must be true:
● The decedent was at least 65 as of the date of death; AND To qualify for the Ohio Adoption Credit, the decedent must have
● The decedent has not previously taken the Ohio lump sum adopted, during the tax year, a child who was under the age of 18
distribution credit. and not his/her stepchild.
The credit is equal to $50 per return. This credit is not related to or based on the calculation of the
See R.C. 5747.055(F). federal adoption credit. Instead, the credit is the greater of $1,500
or the adoption-related expenses, capped at $10,000. For purposes
Line 46 – Lump Sum Distribution Credit of this credit, “adoption-related expenses” include all of the following:
Note: If the estate takes this credit, it cannot take the $50 senior ● Medical care expenses of the birth mother or child in connection
with the pregnancy or birth;
citizen credit on this year’s return or any future return. ● Legal fees, guardian ad litem fees, and court expenses in
To qualify for this credit, all of the following must be true: connection with the adoption;
● The decedent was at least 65 as of the date of death; ● Adoption agency fees; AND
● The decedent must have received a total lump sum distribution ● Certain living expenses, not exceeding $3,000, for the birth mother
from a qualified pension, retirement or profit sharing plan; that are incurred during pregnancy.
● This income was included in the estate’s federal taxable income The estate may claim one credit for each adoption. This credit is
(e.g. it was not distributed to any beneficiary); AND nonrefundable; however, any unused portion can be carried forward
● The decedent has not previously claimed this credit for up to five consecutive years.
Use the Lump Sum Worksheet on page 23 to calculate this credit. For more information, see tax.ohio.gov for FAQs (in the “Income-
See R.C. 5747.055(G). Adoption Credit” topic).
Line 47 – Child and Dependent Care Credit See also R.C. 5747.37 and 3107.055(C).
To qualify for this credit the decedent must have claimed the federal
“credit for child and dependent care expenses” on federal form Schedule IV – Estate Ohio Resident Credit
2441. See Child and Dependent Care Credit Worksheet on page 22.
To determine the income taxes paid to another state or the District
See R.C. 5747.054 of Columbia, the estate must use IT RCTE. See page 16 for the IT
RCTE instructions.
The credit equals the lesser of the income taxes paid to another state
or the District of Columbia, or the portion of the Ohio tax liability
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IT 1041
Rev. 12/22
attributable to income taxed by another state. Nonresident estates Schedule VII – Apportioned Income for Trusts
are not entitled to this credit.
See R.C. 5747.05(B). Line 62 – Business Income and Qualifying Investment Income
Enter the trust’s portion of Ohio taxable income (line 3) not included
Schedule V – Estate Nonresident Credit on line 59 to the extent such income is either of the following:
Nonresident estates should enter the portion of Ohio taxable income ● Modified Business income/loss: Income included in a trust’s
on line 3 that is not apportioned or allocated to Ohio. Ohio taxable income after such taxable income is first reduced
To determine the portion of the Ohio taxable income (IT 1041, line by the qualifying trust amount, if any. Electing Small Business
3) that is not apportioned or allocated to Ohio, the estate must use Trust (ESBT) income is apportionable to Ohio as modified
form IT NRCE obtained at tax.ohio.gov. Include this form with the business income and is reported in Schedule VII. See R.C.
IT 1041. 5747.01(AA)(1) and 5747.01(S)(13)
See R.C. 5747.05(A),5747.20 5747.21, and R.C. 5747.231. ● Qualifying Income attributable to investment income/loss:
transaction fees for the acquisition, ownership, or disposition
Schedule E – Nonrefundable Business Credits of intangible property, including the:
● Loan fees;
Use Schedule E to claim nonrefundable business credits. The trust/ ● Financing fees;
estate may obtain Schedule E at tax.ohio.gov. ● Consent fees;
● Waiver fees;
Trust/estate is only● Application fees; entitled to the portion of the
Schedule E credit that relates to the retained ● Net management fees;
! earnings in the trust/estate. ● Dividend income;
CAUTION ● Interest income;
● Net capital gains from the sale, exchange, or other
See R.C. 5747.02(C)(3). disposition of intangible property; AND
● All types and classifications of income from distributive
Schedule VI – Allocated Qualifying Trust Amounts shares of income from other PTEs.
● This list is not all inclusive. See R.C. 5747.012.
Line 59 – Allocated Qualifying Trust Amounts
See R.C. 5747.01(AA)(1) and 5747.013
A trust’s income is a “qualifying trust amount” if all of the following
are true: Schedule VIII – Allocated Nonbusiness Income for Trusts
● The income is included in the trust’s Ohio taxable income (IT
1041, line 3); Line 65 - Resident Trusts: Trust’s Portion of Ohio Taxable
● The income is a capital gain or loss from the sale, exchange
or other disposition of either an ownership interest in, or debt Income
obligations of, a qualifying investee; Resident trusts enter the trust’s Ohio taxable income (line 3) not
● The trust owns at least 5% of the qualifying investee at any reported on lines 59 or 62.
time during the 10-year period ending on the last day of the
trust’s tax year; AND Line 66 - Nonresident Trusts: Trust’s Portion of Ohio Taxable
● The book value of the qualifying investee’s physical assets is
available. Income
A “qualifying investee” is any entity in which a trust has an ownership Nonresident trusts enter the following types of nonbusiness income
interest, or an entity or unit of government in which the trust owns to the extent included in the trust’s Ohio taxable income (line 3) and
debt obligations. Information is “available” if it can be obtained by not reported on lines 59 or 62:
the trust’s due date for filing the IT 1041. ● Capital gains or losses from the sale, exchange or transfer of
Most income is not a qualifying trust amount. Instead, it is modified Ohio real property and/or Ohio-based tangible personal property;
business income, qualifying investment income, or modified ● Rents and royalties from Ohio real property and/or tangible
personal property used in Ohio,
nonbusiness income. ● Patents and copyright royalties used by the payor in Ohio; AND
● Ohio Lottery Commission winnings and gains and/or losses
See R.C. 5747.01(AA)(2),(5) and (6) and 5747.011. See also T. from the sale or transfer of such winnings.
Ryan Legg Irrevocable Trust v. Testa, 2016-Ohio-8418.
Note: If distributive share is business income/loss from a pass-
Line 60 - Percentage of Closely Held Investee’s Physical Assets through entity, use Schedule VII.
Located Within Ohio
See R.C. 5747.01(AA)(3).
The percentage is calculated as follows:
Schedule IX – Tax Credit for Resident Trusts
Net book value of the qualifying investees physical assets in Ohio
Note: The credit must be taken prior to taking any other credit.
Net book value of the qualifying investees physical assets
everywhere To determine the income taxes paid to another state or the District
of Columbia, the estate must use IT RCTE. See page 16 for the IT
“Net book value” is the asset’s cost minus its accumulated RCTE instructions.
depreciation. If the qualifying trust amount from capital gains/losses
was recognized due to the sale, exchange or other disposition of The credit equals the lesser of the income taxes paid to another
more than one investment, then the fiduciary must make a separate state or the District of Columbia, or the portion of the Ohio tax
calculation for each gain or loss. liability attributable to nonbusiness income taxed by another state.
Nonresident portions of the trust are not entitled to this credit.
Note: If the qualifying investee is a member of a qualifying controlled
group, as defined in R.C. 5733.04(M), then special rules apply for See R.C. 5747.02(C)(2).
purposes of calculating the Ohio ratio.
Line 68 – Portion Taxed by Another State
See R.C. 5747.01(AA)(5) Enter the portion of the resident trust’s allocated nonbusiness income
(line 65) subjected to tax by another state or in the District of Columbia.
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Example: The Pat Smith Trust, a resident trust, has modified Line 75b – Property Rented
Ohio taxable income of $75,000 from dividends. The dividends
are modified nonbusiness income. The tax shown on line 8 is Within Ohio: Enter the average value of all Ohio business property
$2,061. The trust paid $1,100 to another state based on $25,000 rented by the trust during the tax year.
of taxable income, which was reported to that state. The trustee
would calculate the resident tax credit as follows: Total Everywhere: Enter the average value of all business property
Line 68 $25,000 Line 72 $688 rented by the trust during the tax year.
Line 69 $2,061 Line 73 $1,100 Note: Business property rented by the trust is valued at eight times the
Line 70 $75,000 Line 74 $688 net annual rental rate (annual rental expense less sub-rental receipts).
Line 71 0.0275
Payroll Factor
Schedule X - Apportionment Factors The payroll factor is the ratio of:
The three factors comprising the total weighted apportionment ratio Total compensation in Ohio
are 20% property, 20% payroll, and 60% sales. Total compensation everywhere
NOTE: If the “total everywhere” amount of any factor is zero, the “Compensation” means any form of remuneration paid to an
weights of the remaining factors must be proportionately increased employee for personal services. Compensation does not include
to result in a total weighted ratio of 100%. any of the following:
Example: If the entity has no payroll, it must reweight its property ● Amounts paid to employees for services unrelated to a trade or
factor to 25% and its sales factor to 75%. business;
● Amounts reclassified as a distributive share of income from a
If a trust owns an interest in a PTE, when calculating its pass-through entity under R.C. 5733.40(A)(7); AND
apportionment ratio it must include its proportionate share of the ● Amounts paid to employees who are primarily engaged in
other PTE’s “Within Ohio” portion and the “Total Everywhere” portion qualified research.
of property, payroll and sales. These amounts are reported by the Note: Compensation paid to certain employees at an urban job
PTE in the “Entity Apportionment Percentage” section of the IT K-1 and enterprise zone facility, for which Ohio has issued a Tax
issued to the trust. Incentive Qualification Certificate, should be included only in total
compensation everywhere.
NOTE: A PTE may request, in writing with a timely filed original
or amended return, an alternative form of apportionment instead See R.C. 5747.013(B)(2).
of the method listed above. Such request is only valid if approved
by the Department. Line 76 – Payroll
Within Ohio: Enter the total compensation paid in Ohio during the
See R.C 5747.01(AA)(4),5747.013(B) and 5747.231 tax year. Compensation is paid in Ohio if any of the following apply:
Property● The employee’s job is entirely in Ohio; Factor
● The employee’s job is primarily in Ohio with only incidental work
The Property Factor is the ratio of: outside Ohio;
● The employee performs services in Ohio and either the
Average value of property in Ohio headquarters, or, if no headquarters exists, the place from which
Average value of property everywhere the service is directed or controlled, is in Ohio; AND/OR
● The employee is a resident of and performs some services in
“Property” includes any real and tangible personal property that is Ohio, and the headquarters or the place from which the service
owned, rented, subrented, leased and/or subleased in the course of is directed or controlled is not in any state in which some part of
a trade or business by the trust or other PTEs owned by the trust. the service is performed.
Property does not include the following: Compensation paid to any employee of a common or contract motor
● Construction in progress; carrier who performs regularly assigned duties in more than one
● Property not used in a trade or business; state should be assigned to Ohio by the ratio of mileage traveled by
● Property for which Ohio has issued an air, noise, or industrial the employee in Ohio to the total mileage traveled by the employee
water pollution control certificate; AND everywhere during the taxable year.
● Property used exclusively during the tax year for qualified
research. Mileage Traveled by Employee in Ohio
Note: The original cost of qualifying improvements to property Total Mileage Traveled by Employee Everywhere
in an enterprise zone, for which Ohio has issued a Tax Incentive Total Everywhere: Enter the total compensation paid everywhere
Qualification Certificate, should only be included in Total Everywhere. during the tax year.
The “average value” of business property is calculated by averaging See R.C. 5747.013(B)(2).
the total value of all applicable property owned or rented at the
beginning and end of the tax year. Sales Factor
See R.C. 5747.013(B)(1)(b). The sales factor is a ratio of:
Line 75a – Property Owned Sales in Ohio
Within Ohio: Enter the average value of all Ohio property owned Sales everywhere
by the business during the tax year. “Sales” includes gross business receipts such as:
Total Everywhere: Enter the average value of all property owned ● Receipts from the sale of real property, tangible personal
by the business during the tax year. property, or services;
● Receipts from rents and royalties from real and tangible
Property owned by the business is valued at its original cost. personal property; OR
● Receipts from the transfer of or the right to use intellectual
property such as trademarks, trade names, patents, and
copyrights
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IT 1041
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“Sales” does not include any of the following: Schedule XII - Refundable Business Credits
● Receipts from the transfer of real or tangible personal property
that is either a capital asset or an Internal Revenue Code Note: The trust/estate can only claim the distributive share of direct
section 1231 asset; AND and indirect refundable business credits attributable to the trust/
● Receipts from sales to certain public utilities, insurance estate’s retained earnings. Credits related to income distributed by
companies, and financial institutions described in R.C. the trust/ estate must be claimed by the beneficiary.
5747.013(B)(3).
See R.C. 5747.02(C)(3)
Note: Income amounts excluded from the sales factor may still be
considered business income under Ohio law. R.C. 5747.013. Line 81 – Motion Picture and Broadway Production Credit
Line 77 – Sales This credit is granted by the Ohio Department of Development
(ODOD). To claim the credit, the trust/estate must attach a copy of
Within Ohio: Enter gross receipts from sales within Ohio during the the certificate from ODOD that indicates the amount of the credit and
tax year. Sales within Ohio include all of the following: the tax year for which the credit is awarded. Additionally, if this credit
● Receipts from sales of tangible personal property, less returns is based on the trust’s/estate’s ownership of a PTE that holds the
and allowances, to the extent the property was received by the certificate, the trust/estate must also include, when filing its return,
purchaser in Ohio; AND documentation of the portion of the credit to which the trust/estate
● Receipts from sales, other than tangible personal property if: is entitled. This amount can be refunded, in whole or in part, to
● The income-producing activity is performed entirely within the extent that it exceeds the trust’s/estate’s total Ohio tax liability.
Ohio; OR
● The income-producing activity is performed both within For additional information about the requirement for this credit, visit
and without Ohio and a greater proportion of the income- the Ohio Department of Development’s website at development.
producing activity is performed within Ohio than in any ohio.gov, or call 1-800-848-1300.
other state, based on cost of performance.
See R.C. 5747.66.
If the income-producing activity involves the performance of personal
services both within and without Ohio, the services performed in Line 82 – Refundable Job Creation Credit and Job Retention
each state will constitute a separate income-producing activity. Credit
In such case the gross receipts for the performance of services These credits are granted by the Ohio Department of Development
attributable to Ohio shall be measured by the ratio that the time spent (ODOD). To claim the credit, the trust/estate must attach a copy of
in performing such services in Ohio bears to the total time spent the certificate from ODOD that indicates the amount of the credit and
in performing such services everywhere. Time spent in performing the tax year for which the credit is awarded. Additionally, if this credit
services includes the amount of time expended in the performance of is based on the trust’s/estate’s ownership of a PTE that holds the
a contract or other obligations that gives rise to such gross receipts. certificate, the trust/estate must also include, when filing its return,
documentation of the portion of the credit to which the trust/estate
Personal service not directly connected with the performance of is entitled. This amount can be refunded, in whole or in part, to
the contract or other obligations (for example, time expended in the extent that it exceeds the trust’s/estate’s total Ohio tax liability.
negotiating the contract) is excluded from the computation.
For additional information about the requirements for this credit, see
The term “income-producing activity” means, with respect to each the Ohio Department of Development’s website at development.
separate item of income, the transaction and activity directly ohio.gov, or call 1-800-848-1300.
engaged in by the taxpayer in the regular course of its trade or
business for the purpose of obtaining gains or profits. Such activity See R.C. 5747.058(A),122.171 , and formerR.C. 122.171(B).
does not include transactions and activities performed on behalf Line 83 – Pass-Through Entity Credit
of the taxpayer, such as those conducted on its behalf by an
independent contractor. This credit is for taxes paid on the trust’s/estate’s behalf by a PTE
on its IT 4708, IT 4738, or IT 1140. To claim this credit, attach a
The term “cost of performance” means direct costs determined in copy of the IT K-1 issued to this trust/estate by the PTE reporting:
a manner consistent with generally accepted accounting principles ● Income taxes paid by the PTE (IT K-1, line 3); AND/OR
and in accordance with accepted conditions or practices in the ● Indirect PTE credits (IT K-1, line 4) from taxes paid by a PTE
taxpayer’s trade or business. For purposes of this term, receipts the trust/estate indirectly owns.
from rental property are sitused to this state if the property (i) is
used entirely in this state or (ii) is used more in this state than in If the trust/estate does not have an IT K-1, the trust/estate must
any other state. provide a narrative and/or diagram, including ownership percentages
Note: For tangible personal property, where the property is “received and FEINs, detailing the ownership structure of the PTEs.
by the purchaser” is not the same as where the purchaser takes
physical or legal possession. Instead, it is considered “received” See 5747.08(I), 5747.059, and 5747.39.
where it is ultimately used by the purchaser. Line 84 – Venture Capital Credit
Total Everywhere: Enter the gross receipts from sales everywhere This credit is granted by the Ohio Department of Development
during the tax year. (ODOD). To claim the credit, the trust/estate must attach a copy of
See R.C 5747.013(B)(3). the certificate from ODOD that indicates the amount of the credit and
the tax year for which the credit is awarded. Additionally, if this credit
Schedule XI - Net Payment Worksheet is based on the trust’s/estate’s ownership of a PTE that holds the
certificate, the trust/estate must also include, when filing its return,
Note: Please do not include refundable business credits on this documentation of the portion of the credit to which the trust/estate
schedule. is entitled. This amount can be refunded, in whole or in part, to
The trust/estate is only entitled to the portion of the Schedule E the extent that it exceeds the trust’s/estate’s total Ohio tax liability.
credit that relates to the retained earnings in the trust/estate. See For additional information about the requirement for this credit, see
R.C. 5747.02(D)(3). the Ohio Department of Development’s website at development.
ohio.gov, or call 1-800-848-1300.
See R.C. 5747.80.
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Line 85 – Historic Preservation Credit Column E: Divide the amount in Column B by Column D. This is the
This credit is granted by the Ohio Department of Development, “annual depreciation deduction amount” for the deduction period.
(ODOD). To claim the credit, the PTE must attach a copy of the Report the amount on line 39.
certificate from ODOD that indicates the amount of the credit and Note: In a given tax year, the trust/estate may need to report a
the tax year for which the credit is awarded. Additionally, if this mixture of add-back ratios on Schedule XIII, due to investment in
credit is based on the PTE’s ownership of another PTE that holds multiple PTEs. In this scenario, check the 5/6 box and provide an
the certificate, the PTE must also include, when filing its return, explanation of the ratio. The trust/estate may wish to attach this
documentation of the portion of the credit to which the PTE is explanation to future years’ returns.
entitled. For credits approved after September 13, 2022 and before
July 1, 2024, the maximum annual credit amount was increased Follow the same procedure for the beneficiaries of the Trust on the
from $5,000,000 to $10,000,000 per taxable year, and the entire IT K-1 under Depreciation Information and fill out the Supplemental
credit can be taken as a refundable credit. Information portion.
For additional information about the requirements for this credit Schedule XIV - Beneficiary Schedule
or the new enhanced credit visit development.ohio.gov, or call
1-800848-1300. Include all resident and nonresident beneficiaries of the estate or trust.
See R.C. 5747.76 and 149.311(I).
IT RCTE - Ohio Trust/Estates Resident Credit
Schedule XIII - IRC §168(k) Bonus Depreciation and §179 Trusts/estates must use the IT RCTE to calculate their resident credit.
Expense Add-back Schedule The resident credit is equal to the lesser of the total income taxes
Prior tax year add-back amount and add-back ratio. paid on its income or:
Trusts:
Line 88 - Total Current Year §168k Bonus Depreciation and The portion of the trust’s modified Ohio nonbusiness income that
§179 Expense Add-Back was earned while a resident of Ohio and subjected to income tax by
another state or the District of Columbia.
Total current year add-back from line 28
ADD-BACK Estates:
The portion of the estate’s Ohio taxable income that was earned while
Source of §179 §168(k) Add-back Add-back a resident of Ohio and subjected to income tax by another state or
Depreciation Add-back Amount Ratio (2/3, Amount the District of Columbia.
Amount 5/6, 6/6)
For both trusts and estates, “state” means only one of the 50 United
States of America. State does not include any country, province,
or city. Additionally, trusts/estates cannot claim a resident credit for
income earned in a state without a trust/estate income tax. Thus,
those states are not listed on form IT RCTE.
Total add-back
for tax year: Include this form with the IT 1041 and retain a copy for the trust’s/
estate’s records.
Line 89 - Prior Years Add-Back Amount and Applicable Add-
Back Ratio Column A – Income Taxed
Use this table to calculate the current deductions from prior year Trusts: For each state or the District of Columbia for which the trust
add-back amounts and applicable ratios and report on line 39. filed an income tax return, enter the portion of the trust’s modified
Ohio nonbusiness taxable income that was subjected to income tax
§168(k) Bonus Depreciation and §179 Expense Deduction Worksheet on such return.
A B C D E
Add-back
Tax Year Source of Depreciation Ratio (2/3, 5/6, Deduction Annual Estates: For each state or the District of Columbia for which the
Depreciation Add-back 6/6) Period Depreciation estate filed an income tax return, enter the portion of the estate’s
Amount Deduction
Amount Ohio taxable income that was subjected to income tax on such return.
2021
For both trusts and estates, amounts deducted on Ohio Schedule
2020 II (for example, certain municipal and state income tax refunds) are
2019 not included in Ohio taxable income, and thus are not eligible to be
included on this line.
2018
2017 Column B – Tax Paid
For each state or District of Columbia for which the trust/estate filed an
Column B: Enter the depreciation expense add-back. income tax return, enter any income taxes paid for the current tax year.
Column C: Enter the ratio used (5/6, 2/3, or 6/6) to calculate the
depreciation expense add-back. Note: Do not include taxes paid to any country, province, or city.
Column D: Enter the deduction period based on the following chart:
Add-back Ratio Deduction
Period
5/6 5 Years
2/3 2 Years
6/6 6 Years
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IT NRCE - Ohio Nonresident Credit Calculation
These instructions are used to complete the form IT NRCE and line 54 of the Ohio IT 1041.
Estates must use the IT NRCE to calculate the nonresident portion Line 6 – Lottery and Casino Winnings
of their federal taxable income. This amount is used to calculate
the Ohio nonresident credit. Only nonresidents estates may use Enter lottery prizes and casino winnings in Column B that were:
this form. ● Paid by the Ohio lottery commission; OR
● Paid by a casino located in Ohio
Include this form with the completed IT 1041 and retain a copy for
record. If the tax preparation software allows for PDF attachments, Also enter any income from the sale of a lottery prize issued by the
the trust/estate should include a copy of this form. Ohio lottery commission.
Individuals should use the IT NRC instead of the IT NRCE to cal- See R.C. 5747.20(A), (B)(5) and (B)(7).
culate their Ohio nonresident credit. Both forms are available at
tax.ohio.gov. Line 8 – Net Additions from Ohio Schedule II
Section I – Nonresident Credit Calculation Do not include any 168(k) and §179 depreciation expense add-
All Ohio nonresident estates must complete Part A and Part B. back made on Ohio Schedule II. Such amounts are already
included in the calculation of line 7.
For Column A (Federal Amount), enter only the specified items
of income to the extent they are included in the calculation of the Only include the portion of other Ohio Schedule II additions that
federal taxable income. were:
● Paid or accrued and allocated to Ohio; OR
Except for line 5, list only non-business income ● Related to Ohio activities
amounts in column B. All Ohio business income
! should be listed on line 5 after completing See R.C. 5747.20(B)(6).
CAUTION Sections II and III of this form.
Line 9 – Net Deductions from Ohio Schedule II
Line 1 – Nonbusiness Interest and Dividend Income
Only include the portion of other Ohio Schedule II deductions that
Enter interest and dividends paid or accrued and allocated to Ohio were:
in Column B. See R.C. 5747.20(B)(6). ● Paid or accrued and allocated to Ohio OR
● Related to Ohio activities
Line 2 – Nonbusiness Rent and Royalty Income
Certain Ohio Schedule II deductions either do not affect the calcula-
Enter rents and royalties in Column B that were received or derived: tion of the Ohio nonresident credit or are accounted for elsewhere
● From real property located in Ohio; on this form.
● From tangible personal property to the extent utilized in Ohio; OR
● From patents or copyrights to the extent they were utilized in Ohio Do not enter any amounts directly deducted on the following
lines of Ohio Schedule II:
Ohio law defines when tangible personal property, patents, and
copyrights are “utilized in Ohio.” ● Line 33 – State or Municipal Income Tax Overpayments
● Line 39 – Ohio Depreciation Deduction
See R.C. 5747.20(A), (B)(3) and (B)(4).
See R.C. 5747.20(B)(6).
Line 3 – Nonbusiness Capital Gain Income
Line 10 – Income Distribution Deduction
Enter capital gains and/or losses in Column B that:
Deduct income distribution deduction utilized on page 1 of the
● Resulted from the transfer of real property located in Ohio; OR federal 1041 on Section I, Column A.
● Resulted from the transfer of tangible personal property that,
when transferred, was located in Ohio Deduct income distribution deduction at the same ratio of Ohio in-
See R.C. 5747.20(A) and (B)(2). come to Federal income on Section I, Column B based on amounts
from lines 1-6. For more information on how to determine this
Line 4 – Nonbusiness Other Income amount, see page 21.
Enter other nonbusiness income reported on the federal return, and Example: An estate has $1,000,000 in business income. $100,000
paid or accrued and allocated to Ohio in Column B. is apportioned to Ohio. There is a $500,000 distribution made to
the beneficiaries.
Do not enter any income directly deducted on Ohio Schedule II,
such as state and local tax refunds. $100,000
= 0.1
See R.C. 5747.20(B)(6). $1,000,000
Federal distribution deduction = $500,000
Ohio distribution deduction = $50,000
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Line 11 – Federal Taxable Income Deduction Section III – Business-Level Income &
Deduct the total amount of federal allowable deductions utilized on Apportionment
page 1 of the federal 1041 on Section I, Column A.
Complete a separate Section III for each business having property,
Deduct the total amount of federal allowable deductions at the payroll, and/or sales in Ohio. However, if an Ohio IT K-1 reporting
same ratio of Ohio income to Federal income on Section I, Column income from a pass-through entity is attached with the IT NRCE, a
B based on amount from lines 1-6. Section III does not need to be completed for that entity.
For each Section III completed, you must include the name of estate,
Example: An estate has $700,00 in nonbusiness income. $35,000
FEIN / SSN, and ownership percentage in the business, as well as
is allocated to Ohio.
the business’ name and FEIN (if applicable) in the spaces provided.
There are $200,000 in deductions reported on the federal 1041. Part A
$35,000 Calculate a separate apportionment ratio for each business listed
= 0.05 in Section III. Ohio apportionment is based on a three factor,
$700,000 weighted ratio.
Federal distribution deduction = $200,000 The three factors are property and payroll, each weighted at 20%,
Ohio distribution deduction = $10,000 and sales, weighted at 60%, for a total of 100%. However, if any fac-
tor’s “total everywhere” is zero, the weights of the remaining factors
Section II – Ohio Business Income must be proportionately increased so that the total remains 100%.
List every business in which the entity held an ownership interest Example: ABC LLC is a single-member LLC with no employee
during the tax year. If the entity has more than 20 businesses, in- payroll. In calculating its Ohio apportionment ratio, ABC LLC must
clude additional page 2(s), with only lines 1-20 completed. Total all weight its property factor at 25% and its sales factor at 75%.
businesses reported on the additional page 2(s) on line 21.
If this business receives income from pass-through entities, its ap-
For each business, enter: portionment ratio calculation must include the proportionate share
of each lower-tiered entity’s property, payroll and sales.
● The total business income included on the federal return in
Column A Line 1 – Property Factor
● The Ohio depreciation adjustment in Column B (from Section
III, line 21) The property factor is the ratio of:
● The Ohio apportioned income in Column C (from Section III,
line 17) Average value of property in Ohio
Average value of property everywhere
Each column is independently calculated for each
business. Column A is not a total of Columns B and “Property” includes any real and tangible personal property that is
! C. owned, rented, subrented, leased and/or subleased in the course of
CAUTION a trade or business. Property does not include any of the following:
● Construction in progress
If you have an Ohio IT K-1 for a business, the entity must still list ● Property not used in a trade or business
that business and check the “IT K-1” box. Additionally, the entity ● Property for which Ohio has issued an air, noise,or industrial
must enter: water pollution control certificate AND
● The total business income included on the federal return in ● Property used exclusively during the tax year for qualified re -
Column A search.
● The Ohio depreciation adjustment in Column B (from Ohio IT Note: The original cost of qualifying improvements to property in an
K-1, line 1c) enterprise zone, for which Ohio has issued a Tax Incentive Qualifica-
● The Ohio apportioned income in Column C (from Ohio IT K-1, tion Certificate, should be included only in Column B.
line 1a plus line 1b)
The “average value” of business property is calculated by averag-
Line 22 – Column Totals ing the total value of all applicable property owned or rented at the
beginning and end of the tax year.
Column A: This is the total of all business income reported on the
federal return. See R.C. 5747.21(B) and 5733.05(B)(2)(a).
Column B: This is the total of all Ohio apportioned depreciation Line 1(a) – Property Owned
adjustments. The total may be a positive or negative number. Enter
this amount on Section I, line 7. Column A: Enter the average value of all Ohio business property
owned during the tax year.
Column C: This is the total of all Ohio apportioned business income. Column B: Enter the average value of all business property owned
It may be positive or negative. Enter the amount on Section I, line 5. during the tax year.
Property owned by the business is valued at its original cost.
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Rev. 12/22
Line 1(b) – Property Rented ● Receipts from the transfer of real or tangible personal property
that is either a capital asset or an Internal Revenue Code sec-
Column A: Enter the average value of all Ohio business property tion 1231 asset AND
rented during the tax year. ● Receipts from sales to certain public utilities, insurance compa -
nies, and financial institutions described in R.C. 5733.05(B)(2)(c)
Column B: Enter the average value of all business property rented
during the tax year. Note: Income amounts excluded from the sales factor may still be
considered business income under Ohio law.
Property rented by the business is valued at eight times the net
annual rental rate (annual rental expense less subrental receipts). See R.C. 5747.21(B) and 5733.05(B)(2)(c).
Line 2 – Payroll Factor
Column A: Enter gross receipts from sales within Ohio during the
The payroll factor is the ratio of: tax year. Sales within Ohio include all of the following:
● Receipts from sales of tangible personal property, less returns
Total compensation paid in Ohio and allowances, to the extent the property was received by the
Total compensation paid everywhere purchaser in Ohio
● Receipts from services to the extent the purchaser ultimately
“Compensation” means any form of remuneration paid to an em- used or received the benefit of the services in Ohio
ployee for personal services. Compensation does not include any ● Rents and royalties from tangible personal property to the extent
of the following: the property was used in Ohio
● Amounts paid to employees for services unrelated to a trade ● Receipts from the transfer of certain intellectual property to the
or business extent the property was used in Ohio
● Amounts reclassified as a distributive share of income from a ● Receipts from the right to use certain intellectual property in Ohio
pass-through entity under R.C. 5733.40(A)(7) AND ● Receipts from the sale of real property located in Ohio AND
● Amounts paid to employees who are primarily engaged in quali- ● Rents and royalties from real property located in Ohio
fied research
Note: For tangible personal property, where the property is “received
Note: Compensation paid to certain employees at an urban job and by the purchaser” is not the same as where the purchaser takes
enterprise zone facility, for which Ohio has issued a Tax Incentive physical or legal possession. Instead, it is considered “received”
Qualification Certificate, should be included only in Column B. where it is ultimately used by the purchaser.
See R.C. 5747.21(B) and 5733.05(B)(2)(b). See R.C. 5733.05(B)(2)(c)(i) and (ii).
Column A: Enter the total compensation paid in Ohio during the Column B: Enter the gross receipts from sales everywhere during
tax year. Compensation is paid in Ohio if: the tax year.
● The employee’s job is entirely in Ohio
● The employee’s job is primarily in Ohio with only incidental work Line 4 – Ohio Apportionment Ratio
outside Ohio
● The employee performs services in Ohio and either the head- The amount on this line represents the Ohio apportionment ratio for
quarters, or, if no headquarters exists, the place from which the this business. This is used in Parts B and C to determine:
service is directed or controlled, is in Ohio OR ● Income apportioned to Ohio AND
● The employee is a resident of and performs some services in
Ohio, and the property to the extent the property was used in Ohio ● Ohio apportioned depreciation adjustments from Ohio Schedule
II.
Line 3 – Sales Factor Part B
The sales factor is the ratio of: For each Section III completed, enter only amounts that are both
included in the calculation of the federal adjusted gross income
Total sales in Ohio and are “business income” under Ohio law. Remember, because of
differences between federal and Ohio law, some amounts reported
Total sales everywhere as business income on the federal return may not be business
income on this schedule. Do not simply list the amounts from
“Sales” includes gross business receipts such as: the federal return.
● Receipts from the sale of real property, tangible personal prop-
erty, or services For more information on how Ohio defines business income and ex-
● Receipts from rents and royalties from real and tangible personal amples of business income, see page 13. See also R.C. 5747.01(B)
property OR and 5733.40(A)(7).
● Receipts from the transfer of or the right to use intellectual prop-
erty such as trademarks, trade names, patents, and copyrights Line 5 – Schedule B, Interest and Ordinary Dividends
“Sales” does not include: Enter taxable interest and ordinary dividends reported on federal
Schedule B that qualify as business income.
● Interest and dividends
● Receipts from the transfer of intangible property other than Line 6 – Schedule C, Profit or Loss from Business
trademarks, trade names, patents, copyrights or other similar
intellectual property Enter the net profit or loss from the business reported on federal
Schedule C. Show a business loss as a negative number.
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IT 1041
Rev. 12/22
Line 7 – Schedule D, Capital Gains and Losses Line 15 – Total R.C. 5747.212 Income
Enter capital gains or losses reported on federal Schedule D that Enter any R.C. 5747.212 income or loss included in the federal
qualify as business income. Show a net capital business loss as a adjusted gross income. “R.C. 5747.212 income” is gain or loss
negative number. resulting from the transfer of an ownership interest in a closely held
business having nexus with Ohio. Show the amount as a negative
Do not include any amounts that represent a R.C. 5747.212 gain number if the amount was a loss.
or loss. Instead, include those amounts on line 15.
Line 16 – R.C. 5747.212 Income Apportioned to Ohio
Line 8 – Schedule E, Supplemental Income and Loss
R.C. 5747.212 amounts are apportioned differently than other
Enter the net business income or loss reported on federal Schedule business income. For additional information on how to apportion
E. Show a net business loss as a negative number. Do not include these amounts, see R.C 5747.212 as well as Corrigan v. Testa,
any guaranteed payments on this line, even if included on 2016-Ohio-2805.
federal Schedule E.
Enter the Ohio portion of the R.C. 5747.212 amount entered on line
Line 9 – Guaranteed Payments, Compensation, and/or Wages 15. Show a loss as a negative number. Include the apportionment
calculation with this form.
If this business is a pass-through entity in which the entity has at
least a 20% direct or indirect ownership, enter any guaranteed Line 17 – Ohio Apportioned Income
payments or compensation paid to the entity by another entity, or
a professional employer organization on its behalf. The amount on this line represents the Ohio portion of the
income from this business. Enter this amount in Section
Note: “Indirect” ownership does not include beneficial or construc- II, Column C of the line corresponding to this business.
tive ownership via Internal Revenue Code attribution rules.
Part C
Line 10 – Schedule F, Profit or Loss from Farming
Line 18 – Ohio Depreciation Add-back
Enter the net profit or loss from farming reported on federal Schedule
F. Show a net business loss as a negative number. Enter any portion of the §168(k) bonus depreciation and §179
expense:
Line 11 – Other Business Income and/or Federal Conformity
Additions ● That was reported as an Ohio Schedule II addition AND
● That is attributable to this business.
Enter any business income included in the federal adjusted gross
income that was not entered on lines 5 through 10. Include on Line 19 – Ohio Depreciation Deduction
this line any amounts reported on the federal 4797 that constitute
business income. Enter any portion of the deduction for prior year §168(k) bonus
depreciation and §179 expense add-backs:
Also, enter any federal conformity additions reported on Ohio • That was reported as an Ohio Schedule II deduction AND
Schedule II related to this business. • That is attributable to this business
Line 12 – Other Business Deductions and/or Federal Confor- This amount is calculated using the current year’s Ohio Schedule
mity Deductions A. Do not use an amount from a prior year’s filing.
Enter any business deductions included in the federal adjusted gross Line 21 – Ohio Apportioned Depreciation
income that were not entered on lines 5 through 10 of this section.
Include on this line any amounts reported on the federal 4797 that The amount on this line represents the Ohio portion of the Ohio
constitute business loss. Schedule A depreciation adjustment from this business. Enter this
amount in Section II, Column B of the line corresponding to this
Also, enter any federal conformity deductions reported on Ohio business.
Schedule II related to this business.
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IT 1041
Rev. 12/22
Matching Expense and Loss Amounts
and Distribution Deductions Against Income and Gain
For use when calculating the portion of a fiduciary’s expenses, losses, and distributions deduction related to its income.
The fiduciary should directly match items of income and gain with
any directly related expenses and losses. (A) Rental Activity
For amounts that the fiduciary cannot directly match to items of Rents $ 530,000
income and gain, the fiduciary should proportionately assign Less: Depreciation expense - 100,000
those expenses and distributions. Generally, the basis for assign- Real estate taxes and payroll expenses - 25,000
ing expenses, losses and distributions will be the relative income Attorney fees (for lease preparations) - 5,000
or gain related to each activity
. Tentative apportionable profit from rental
Example #1 - Assigning Direct Distributions activities (business income) $ 400,000
The trust document directs the fiduciary to distribute to Lee, a ben-
eficiary, 75% of the yearly profit from rental activities.
(B) Portfolio Income
● The profit from these rental activities is $100,000 of business
income. Dividends, interest and net capital gains $ 301,000
● The trust had no other income and the only distribution to Lee Less: Investment advisor fees - 1,000
from the trust was $75,000.
Tentative profit from “portfolio” income
The fiduciary must reduce the trust’s rental profit by the distribution (nonbusiness income) $ 300,000
deduction attributable to the rental profit (in this example, 75% of
the rental activity profit). So the amount to be shown on Schedule
VII, line 62, will be $25,000. Total income excluding $70,000 indirect expense is $700,000.
Example #2 - Assigning Direct and Indirect Distributions,
Expenses and Losses Calculate the portion of $70,000 indirect expense for each income
category as follows:
The Trust has the following amounts listed on its Federal 1041:
Gross rent $530,000 (A) Rental Activity (Schedule VII):
Dividend income 200,000 (A) Divide by total income $700,000 excluding indirect expense
Interest Income 41,000 (B) of $70,000:
Net capital gain (stocks and bonds) 60,000 (B)
Rental property depreciation expense - 100,000 (B) $ 400,000 = .571428
Rental property real estate taxes and related $700,000
payroll expenses - 25,000 (A)
Attorney fees (lease preparation) - 5,000 (A) Multiply:
Investment advisor fees (stocks & bonds) - 1,000 (B) $ 70,000 X .571428 = $40,000
Fiduciary fees (based upon profit) - 10,000 (C)
Distribution deduction (discretionary) - 60,000 (C) Rental income - assigned rental expense
Taxable income per IRS form 1041 $ 630,000 $400,000 - $40,000 = $360,000
Additionally, assume the following:
Portfolio Income (Schedule VIII):
• The rental profit constitutes business income; Divide by total income $700,000 excluding indirect expense
• All other income and gain constitute nonbusiness income; of $70,000:
• There are no “Schedule II” Ohio adjustments (so Ohio taxable
income equals federal taxable income); AND $ 300,000 = .428571
• There are no amounts to report on IT-1041 Schedules VI or VII; AND $700,000
• Income from the federal schedule is categorized as follows:
(A) = Rental Activity Multiply:
(B) = Portfolio Income $ 70,000 X .428571 = $30,000
(C) = Indirect Expense and Deductions
Portfolio income - assigned portfolio expense
The total indirect expense and deductions for this trust are $70,000. $300,000 - $30,000 = $270,000
The expenses to the specific income categories are calculated is
as follows:
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IT 1041
Rev. 12/22
Matching Allocation Based on Distributions Made
This guide is useful when calculating credits for a trust/estate when distributions are made.
The fiduciary must split credits between the trust/estate and its Example #3 - Partial distribution based on type of income
beneficiaries based on the fiduciary’s retained earnings and distri- The trust is an investor in a pass-through entity (PTE). The trust
butions to its beneficiaries. The proportionate share of the credits receives:
must follow the distribution to the beneficiaries of the trust or estate.
● A federal K-1 showing $200,000 of PTE income.
See R.C. 5747.02(C)(3), R.C. 5747.08(I) and R.C. 5747.059 ● An IT K-1 showing $17,000 in “Ohio tax paid on behalf of this
investor/beneficiary (net of overpayments)”.
Example #1 - Full distribution of income ● A capital gain of $50,000 from its own investment of trust assets.
An estate receives a W2 reporting $100,000 of income and $1,000
of Ohio withholding. The income is included on the estate’s federal The income is included on the trust’s federal 1041 as “adjusted
1041 as “adjusted total income” but is then deducted as an “income total income”; $200,000 is then deducted as an “income distribution
distribution deduction”. The income was distributed to the estate’s deduction”. The income was distributed to the trust’s sole benefi -
sole beneficiary, an individual. ciary, an individual.
Because 100% of the income is distributed to the estate’s ben- Because this trust has income from multiple sources, the amount of
eficiary, the beneficiary is entitled to 100% of the $1,000 of Ohio the distribution of the credit depends on what income was retained,
withholding when filing the IT 1040. The estate cannot claim the and what income was distributed by the trust.
credit; the estate should issue an IT K-1 to the beneficiary reflect- (A) If the trust distributes the $200,000 of income from the PTE and
ing the withholding. retains the $50,000 capital gain:
Example #2 - Partial distribution of income ● The beneficiary is entitled to claim 100% of the $17,000 PTE
A trust receives a 1099 reporting $150,000 of income and $3,000 credit on the individual’s IT 1040.
of Ohio withholding. The income is included on the trust’s federal ● The trust is not entitled to the PTE credit on its IT 1041.
1041 as “adjusted total income” and $50,000 is deducted as an
“income distribution deduction”. The income was distributed to the (B) If the trust distributes $150,000 of income from the PTE and the
trust’s sole beneficiary, an individual. $50,000 capital gain, and retains the remaining $50,000 of income
from the PTE:
Because 1/3rd of the income is distributed to the trust’s beneficiary,
the beneficiary is entitled to 1/3rd of the $3,000 of Ohio withholding ● The beneficiary is entitled to 75% of the $17,000 PTE credit
when filing the IT 1040. The trust can claim 2/3 of the $3,000 with- ($12,750) on the individual’s IT 1040.
● The trust is entitled to 25% of the $17,000 PTE credit ($4,250)
holding when filing the IT 1041. The trust should issue an IT K-1 to on its IT 1041. The trust should issue an IT K-1 to the beneficiary
the beneficiary reflecting the 1/3 withholding. reflecting the indirect PTE credit.
Child and Dependent Care Credit Worksheet
1. Enter your Ohio taxable income, IT 1041 line 3 ...................................................................................... 1.
If line 1 is $40,000 or more, STOP. You do not qualify for this credit.
2. Enter the amount on your federal form 2441, line 9c ................................................................................2.
3. Enter 25% of the amount on your federal form 2441, line 11 ....................................................................3.
4. If line 1 of this worksheet is less than $20,000, enter the amount from line 2.
If line 1 is equal to or greater than $20,000 but less than $40,000, enter the amount from line 3.
This is your credit. Enter on line 47 of the IT 1041. ................................................................................. 4.
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IT 1041
Rev. 12/22
Lump Sum Retirement Credit Worksheet
Do not include any retirement income that has been deducted or otherwise excluded from federal adjusted gross income or
Ohio adjusted gross income.
1. Enter all retirement income included in your Ohio taxable income (Ohio IT 1041, line 3) ........................1.
2. Using Table 1 below, enter the multiple corresponding to the lump sum recipient’s age..........................2.
3. Divide line 1 by line 2................................................................................................................................3.
4. Using Table 2 below, enter the retirement income credit based on the amount on line 3.........................4.
5. Line 2 times line 4. This is your lump sum retirement credit. Enter on line 44 of IT 1041 ........................5.
If line 5 is greater than tax liability, IT 1041 line 8, continue to lines 6a-c. Otherwise, stop here.
6a. Line 5 minus tax liability on line 8 of IT 1041 .........................................................................................6a.
6b. Subtract 1 from the amount on line 2......................................................................................................6b.
6c. Divide line 6a by line 6b. This is your lump sum retirement credit for future tax years...........................6c.
Line 1: "Retirement income" means retire- Line 2: Use the recipient’s age as of the Do not round.
ment benefits, annuities, or distributions last day of the tax year (generally, Decem-
that are made from or pursuant to a pen- ber 31). Line 6c: Report this amount in each subse-
sion, retirement, or profit-sharing plan. Ad- quent tax year as your lump sum retirement
ditionally, these amounts must have been Line 6: If your lump sum retirement credit credit.
received on account of retirement and must is greater than your tax liability, complete
be included in your Ohio taxable income. lines 6a through 6c to calculate your lump
sum retirement credit for future tax years.
Do not include any of the following:
● Rollovers from one retirement plan into Line 6b: Subtract 1 from the amount you
another that are not included in your fed- entered on line 2 of this worksheet. For ex-
eral adjusted gross income, ample, if your multiple on line 2 was 19.2,
● Any Social Security benefits. you would enter 18.2 (19.2 - 1) on this line.
Lump Sum Distribution Credit Worksheet
1. Using Table 1 below, enter the multiple corresponding to the lump sum recipient’s age..........................1.
2. Line 1 times $50. This is your lump sum distribution credit. Enter on the Ohio
IT 1041 line 6 ............................................................................................................................2.
Line 1: Use the recipient’s age as of the last day of the tax year (generally, December 31). Remember, this credit is not available to
individuals younger than 65.
Table 1 Table 2
Age Multiple Age Multiple Age Multiple Age Multiple Age Multiple Retirement income included in Retirement
31 51.2 48 34.9 65 20.0 82 8.4 99 2.8 Ohio adjusted gross income income credit
32 50.2 49 34.0 66 19.2 83 7.9 100 2.7 0 – $ 500 0
33 49.3 50 33.1 67 18.4 84 7.4 101 2.5 $ 501 – $ 1,500 $ 25
34 48.3 51 32.2 68 17.6 85 6.9 102 2.3 $ 1,501 – $ 3,000 $ 50
35 47.3 52 31.3 69 16.8 86 6.5 103 2.1 $ 3,001 – $ 5,000 $ 80
36 46.4 53 30.4 70 16.0 87 6.1 104 1.9 $ 5,001 – $ 8,000 $ 130
37 45.4 54 29.5 71 15.3 88 5.7 105 1.8 $ 8,001 or more $ 200
38 44.4 55 28.6 72 14.6 89 5.3 106 1.6
39 43.5 56 27.7 73 13.9 90 5.0 107 1.4
40 42.5 57 26.8 74 13.2 91 4.7 108 1.3
41 41.5 58 25.9 75 12.5 92 4.4 109 1.1
42 40.6 59 25.0 76 11.9 93 4.1 110 1.0
43 39.6 60 24.2 77 11.2 94 3.9 111 0.9
44 38.7 61 23.3 78 10.6 95 3.7 112 0.8
45 37.7 62 22.5 79 10.0 96 3.4 113 0.7
46 36.8 63 21.6 80 9.5 97 3.2 114 0.6
47 35.9 64 20.8 81 8.9 98 3.0 115 0.5
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