Can an Individual Investor file an IT 1040 when the investor has been included in an IT 4708 Composite Pass-Through Entity Return?
If a non-resident individual investor has Ohio-sourced income or loss other than that earned through the pass-through entity that filed an IT 4708 on their behalf and is required to file an Ohio individual income tax return, IT 1040, then the individual non-resident investor is entitled to a refundable credit on the IT 1040 return. The credit is equal to the investor’s proportionate share of the tax paid by the pass-through entity on behalf of the investor and as such, will be allowed a credit for the taxes paid per R.C. 5747.08(J).
However, if a non-resident individual investor included in a composite return has no Ohio-sourced income or loss other than that earned through the pass-through entity that filed an IT 4708 on their behalf, the individual cannot file an IT 1040 return and is not entitled to the refundable pass-through entity credit pursuant to R.C. 5747.08(J).
Business Tax Division Alert
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