New Ohio Residency Requirements for Individual Income Tax

When deciding whether people are responsible for Ohio income tax, the state usually relies on residency: whether the taxpayer actually lives in the state. But establishing residency or non-residency by means of an affidavit can be a challenge, so a new bill has been passed which seeks to clarify the meaning.

H.B. 292, which was signed into law on June 14 by Governor John Kasich, amends Ohio’s “bright line test” – the criteria used to determine whether a taxpayer is treated as a non-resident.  This new bill provides that a taxpayer’s claim of Ohio non-residency is “irrebuttable” if the taxpayer files an affidavit with the tax commissioner stating the following:

  1. The individual had no more than 212 contact periods with the State of Ohio during the tax year.
  2. The individual had at least one abode outside the state during the entire tax year.
  3. The individual did not claim a federal depreciation deduction for an out-of-state residence that is considered their primary domicile for federal tax purposes.
  4. The individual did not hold a valid Ohio driver’s license or identification card at any time during the tax year.
  5. The individual did not receive the benefit of an Ohio homestead exemption for their primary residence real property tax purposes for that tax year.
  6. The individual did not receive an out-of-state tuition discount based on residency for attending an Ohio institution of higher education during that tax year.

The presumption of non-Ohio domicile is “irrebuttable” unless the affidavit filed with the tax commissioner discussed above is false.

Under the previous law, the following facts were not necessarily fatal to the presumption of non-Ohio domicile, but under the new law, these facts will be fatal to a presumption of non-Ohio domicile:

· Having an Ohio driver’s license or Ohio identification card during the taxable year at issue;

· Claiming a depreciation deduction (for example for a home office) for the non-Ohio abode; or,

· Claiming an Ohio homestead benefit (owner-occupied 10% rollback and / or age 65 or greater / permanently disabled 2½% reduction).

Note that the existence of one or more of these facts listed above can, in some circumstances, be overcome for a taxpayer claiming a non-Ohio domicile; the challenge is that the presumption of non-Ohio domicile is lost if one or more of those facts exist.

The deadline for filing the “bright-line” affidavit is no longer May 30 of the year following the taxable year.  Now, the deadline is the 15th day of the 10th month following the close of the taxable year (generally October 15 for most taxpayers).  This change allows those on extension to file the affidavit around the same time that the individual is filing the Ohio tax return.

This information has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice.

You should consult your own tax, legal and accounting advisors before taking action or engaging in any transactions.

Article appears as originally published in the Ohio Jewish Chronicle Thursday June 28, 2018. 

Jackie Jacobs is Executive Director Emeritus of the Columbus Jewish Foundation, the Central Ohio Jewish community’s planned giving and endowment headquarters. 

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