Senate Bill 18 will conform Ohio’s tax laws to changes in federal tax laws. Highlights of the bill include:
- Incorporates into Ohio income tax law changes to federal tax law taking effect since March 27, 2020.
- Exempts “second draw” paycheck protection program (PPP) loan amounts forgiven under the Consolidated Appropriations Act, 2021 from the commercial activity tax (CAT).
- Exempts from the CAT Bureau of Workers’ Compensation (BWC) dividends paid to employers in 2020 and 2021.
- Authorizes the Tax Commissioner to temporarily abate any interest or penalties for the underpayment of state and school district income taxes due on unemployment benefits received in 2020.
- Allows individuals to elect to have state income tax withheld from their unemployment benefits.
- Sets the rate of a withholding tax paid by certain pass-through entities on a percentage of its nonresident investors’ distributive income equal to the income tax rate on taxable business income, effectively reducing those withholding rates.
- Declares an emergency
You can learn more from the Ohio Department of Taxation which posted a summary of the new tax conformity bill.