Frequently Asked Questions

The Ohio Department of Taxation has compiled a list of frequently asked questions covering many different categories.

To view the questions, click on the "Select Category" bar and then click on the category you are interested in.  A list of questions will appear pertaining to that category. Then click on the question you are inquiring about and the answer will appear.

What is the difference between a "tax year" and "taxable year"?

Tax year is the calendar year for which the tax is paid. The tax year is also referred to as the "report year."

Taxable year is the taxpayer's accounting period on which the corporation franchise tax is based.  The Ohio corporation franchise tax report (form FT 1120) is based on the taxpayer's accounting period ending prior to Jan. 1 of the tax year. Exception: A corporation having a 52/53 week calendar year end would file the 2013 franchise tax report. (Example: taxable year ending 01/03/2013 is filed on the 2013 franchise tax report.)

A corporation's franchise tax taxable year is generally the same as its federal taxable year. However, a corporation's franchise tax taxable year may consist of an aggregation of two or more federal taxable years and can exceed one year in length.

The franchise tax for tax year 2013 is paid in 2013 for the privilege of doing business in Ohio during the calendar year 2013. The 2013 franchise tax report (form FT 1120) is based on the corporation's taxable year ending in 2012. Thus, if a corporation has a calendar year end, its 2013 franchise tax report will be based on the corporation's income and activity during the calendar year 2012 and the corporation's net worth as of Dec. 31, 2012. If the corporation has a fiscal year end, its 2013 franchise tax report will be based on the corporation's income and activity during the fiscal year beginning in 2011 and ending in 2012.

Unlike the federal income tax return year (federal form 1120), which is based on the beginning of the taxpayer's accounting period, the Ohio corporation franchise tax report year is the privilege year for which the tax is paid. For example, income earned during a taxpayer's fiscal year beginning July 1, 2011 and ending June 30, 2012 will be reported on the taxpayer's 2011 federal income tax return. However, the taxpayer's income for that same period will be reported on the taxpayer's 2013 Ohio corporation franchise tax report.