Ohio COVID-19 Tax Relief Legislation

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The Ohio General Assembly enacted and the Governor has signed Amended Substitute House Bill 197 (the Act), which is designed to provide relief to taxpayers affected by COVID-19.

Tax Filing and Payment Deadlines

The legislation is not self-executing but authorizes the Ohio Tax Commissioner to extend the due date for filing Ohio tax returns due during the period of the COVID-19 emergency declared by Gov. Mike DeWine’s Executive Order on March 9. The Tax Commissioner may extend deadlines for tax filings, tax payments, and estimated or accelerated payments. The Commissioner may waive penalty and interest amounts that would otherwise be due based on the regular filing and payment deadlines. We will update the changes once the Ohio Tax Commissioner issues his determination.

Municipal Income Tax Withholding

The Act provides relief to employers so employers may continue to withhold municipal income tax at the principal place of business of an employee even though the employee is working in a different location, including the employee’s home, for a period longer than the normal 20-day grace period beyond which the employer must begin withholding. The Act includes the following language, which deems employees working from home to be working in their regular work location for purposes of withholding:

Notwithstanding section 718.011 of the Revised Code, and for the purposes of Chapter 718 of the Revised Code, during the period of the emergency declared by Executive Order 2020-01D, issued on March 9, 2020, and for thirty days after the conclusion of that period, any day on which an employee performs personal services at a location, including the employee’s home, to which the employee is required to report for employment duties because of the declaration shall be deemed to be a day performing personal services at the employee’s principal place of work.

This language also should prevent these wages from being included in the payroll factor in the municipality in which the employees are working. Thus, employers should not be required to file net profits tax returns in the municipalities in which the employees are working.

We strongly recommend that employers relying on this safe harbor document that their workers are required to work from home.

Administrative Deadlines

The Act tolls any “criminal, civil, or administrative time limitation under the Revised Code” that expired or is set to expire between March 9 and July 30. This language appears to suspend limitation periods for administrative actions and appeals before the Ohio Tax Department and appeals to the Ohio Board of Tax Appeals and Ohio courts. Taxpayers should continue to follow pre-existing deadlines until guidance is available from affected agencies and the boards of revision to clarify this provision.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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