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.

How does Ohio treat compensation paid by a pass-through entity to an investor?

Wages, guaranteed payments and other compensation paid by a pass-through entity to an investor that directly or indirectly holds a 20% or greater interest in the entity are considered to be a distributive share of business income pursuant to O.R.C. 5733.40(A)(7). Any such payments that are reported on line 7 of the taxpayer’s federal 1040 should be included on line 4 of the IT BUS.

If any such amounts are included on federal Schedule E and paid by an entity in which the taxpayer directly or indirectly holds less than a 20% interest , those amounts are not considered to be business income and must be deducted from the amount reported on line 4 of the IT BUS.