Ohio § 5747.05

§ 5747.05.

As used in this section, “ income tax ” includes both a tax on net income and a tax measured by net income. The following credits shall be allowed against the aggregate income tax liability

imposed by section 5747.02 of the Revised Code on individuals and estates: (A)(1) The amount of tax otherwise due under section 5747.02 of the Revised Code on such portion of the combined adjusted gross income and taxable business income

of any nonresident taxpayer that is not allocable or apportionable to this state pursuant

to sections 5747.20 to 5747.23 of the Revised Code .  The credit provided under this division shall not exceed the total tax due under section 5747.02 of the Revised Code . (2) The tax commissioner may enter into an agreement with the taxing authorities of any

state or of the District of Columbia that imposes an income tax to provide that compensation

paid in this state to a nonresident taxpayer shall not be subject to the tax levied

in section 5747.02 of the Revised Code so long as compensation paid in such other state or in the District of Columbia to

a resident taxpayer shall likewise not be subject to the income tax of such other

state or of the District of Columbia. (B) The lesser of division (B)(1) or (2) of this section: (1) The aggregate amount of tax otherwise due under section 5747.02 of the Revised Code on such portion of the combined adjusted gross income and taxable business income

of a resident taxpayer that in another state or in the District of Columbia is subjected

to an income tax.  The credit provided under division (B)(1) of this section shall not exceed the total

tax due under section 5747.02 of the Revised Code . (2) The amount of income tax liability to another state or the District of Columbia on

the portion of the combined adjusted gross income and taxable business income of a

resident taxpayer that in another state or in the District of Columbia is subjected

to an income tax.  The credit provided under division (B)(2) of this section shall not exceed the total

amount of tax otherwise due under section 5747.02 of the Revised Code . (3) For the purpose of divisions (B)(1) and (2) of this section, a resident taxpayer's

combined adjusted gross income and taxable business income that is subject to an income

tax levied in another state or in the District of Columbia includes income that is

subject to either (a) a tax similar to the tax imposed by division (D)(1)(a) of section 5747.08 of the Revised Code or (b) a tax enacted for purposes of complying with internal revenue service notice

2020-75.  In computing a resident taxpayer's income tax paid or accrued to another state or

the District of Columbia, the deduction authorized by division (A)(28) of section 5747.01 of the Revised Code shall first be deducted against business income apportioned to this state. (4) If the credit provided under division (B) of this section is affected by a change

in either the portion of the combined adjusted gross income and taxable business income

of a resident taxpayer subjected to an income tax in another state or the District

of Columbia or the amount of income tax liability that has been paid to another state

or the District of Columbia, the taxpayer shall report the change to the tax commissioner

within ninety days of the change in such form as the commissioner requires. (a) In the case of an underpayment, the report shall be accompanied by payment of any

additional tax due as a result of the reduction in credit together with interest on

the additional tax and is a return subject to assessment under section 5747.13 of the Revised Code solely for the purpose of assessing any additional tax due under this division, together

with any applicable penalty and interest.  It shall not reopen the computation of the taxpayer's tax liability under this chapter

from a previously filed return no longer subject to assessment except to the extent

that such liability is affected by an adjustment to the credit allowed by division

(B) of this section. (b) In the case of an overpayment, an application for refund may be filed under this

division within the ninety-day period prescribed for filing the report even if it

is beyond the period prescribed in section 5747.11 of the Revised Code if it otherwise conforms to the requirements of such section.  An application filed under this division shall only claim refund of overpayments

resulting from an adjustment to the credit allowed by division (B) of this section

unless it is also filed within the time prescribed in section 5747.11 of the Revised Code .  It shall not reopen the computation of the taxpayer's tax liability except to the

extent that such liability is affected by an adjustment to the credit allowed by division

(B) of this section. (5) No credit shall be allowed under division (B) of this section: (a) For income tax paid or accrued to another state or to the District of Columbia if

the taxpayer, when computing federal adjusted gross income, has directly or indirectly

deducted, or was required to directly or indirectly deduct, the amount of that income

tax; Division (B)(5)(a) of this section does not apply to income taxes included in the

computation of Ohio adjusted gross income under division (A)(41) of section 5747.01 of the Revised Code and not deducted from Ohio adjusted gross income under division (A)(28) of that section

or to income taxes included in Ohio taxable income under division (S)(16) of section 5747.01 of the Revised Code . (b) For compensation that is not subject to the income tax of another state or the District

of Columbia as the result of an agreement entered into by the tax commissioner under

division (A)(3) of this section;  or (c) For income tax paid or accrued to another state or the District of Columbia if the

taxpayer fails to furnish such proof as the tax commissioner shall require that such

income tax liability has been paid. (C) An individual who is a resident for part of a taxable year and a nonresident for

the remainder of the taxable year is allowed the credits under divisions (A) and (B)

of this section in accordance with rules prescribed by the tax commissioner.  In no event shall the same income be subject to both credits. (D) The credit allowed under division (A) of this section shall be calculated based upon

the amount of tax due under section 5747.02 of the Revised Code after subtracting any other credits that precede the credit under that division in

the order required under section 5747.98 of the Revised Code .  The credit allowed under division (B) of this section shall be calculated based

upon the amount of tax due under section 5747.02 of the Revised Code after subtracting any other credits that precede the credit under that division in

the order required under section 5747.98 of the Revised Code . (E)(1) On a joint return filed by a husband and wife, each of whom had adjusted gross income

of at least five hundred dollars, exclusive of interest, dividends and distributions,

royalties, rent, and capital gains, a credit equal to the lesser of six hundred fifty

dollars or the percentage shown in column B that corresponds with the taxpayer's modified

adjusted gross income, less exemptions for the taxable year, of the total amount of

tax due after allowing for any other credit that precedes this credit as required

under section 5747.98 of the Revised Code , subject to division (E)(2) of this section: A. B. IF THE MODIFIED ADJUSTED GROSS INCOME, LESS EXEMPTIONS, FOR THE TAX YEAR IS: THE CREDIT FOR THE TAXABLE YEAR IS: $25,000 or less 20% More than $25,000 but not more than $50,000 15% More than $50,000 but not more than $75,000 10% More than $75,000 5% (2) The credit shall be claimed in the order required under section 5747.98 of the Revised Code .  No taxpayer shall claim this credit unless the taxpayer's modified adjusted gross

income is less than seven hundred fifty thousand dollars for taxable years beginning

in 2025 or less than five hundred thousand dollars for taxable years beginning in

2026 or thereafter. (F) No claim for credit under this section shall be allowed unless the claimant furnishes

such supporting information as the tax commissioner prescribes by rules.