Nonresiden tax in ohio

Forum|Forum|1 year ago
October 22, 2024
2 replies
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We are florida residents with a summer home in Ohio. If we sell the Ohio home and pay federal capital gains, what if anything will we owe in Ohio?

Bsch4477

Employee

You will owe tax on the gain in Ohio.

Opus 17

Employee

The same thing. Since this is Ohio-sourced income, you will file a non-resident return for Ohio. You only report and pay tax on your Ohio-source income (however, the tax rate may be determined by your total federal income, so you may see it included on the tax form but it is not taxed). When preparing the Ohio non-resident return, you will have to tell Turbotax how to allocate each item of income, the program won't assume for you. (All your income from sale of the house but none of your other income.)

Hal_Al

Employee

Ohio does a convoluted tax calculation for non-residents/part year residents. It calculates tax on total income, then it calculates a non resident/part year resident credit, which it subtracts from the tax it calculated on the total income. The credit is calculated as your non-Ohio income divided by Total adjusted Income multiplied by the total tax. TurboTax (TT) does this by allocating your income as either Ohio or non-Ohio. W-2 income will be allocated by the state name abbreviation shown in box 15 of your W-2. TT will ask you, item by item, in the state section, how much of your other income is Ohio or non-Ohio income. Make sure that your non-Ohio wages show FL (Other state postal abbreviation) in box 15 of your W-2 screen, with the FL amount in box 16.

Since FL does not have an income tax, boxes 15-17 may be blank on your actual W-2. At the W-2 screen, in TT, enter FL in box 15. Put the box 1 amount in box 16 and 0 in box 17.

This system allows Ohio to apply their highest tax rate, based on your total income, while only taxing your Ohio income (the gain on the sale).