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.

Can you provide an example of how the interest penalty is calculated?

Yes. Joe Taxpayer has completed his 2017 IT 1040 which reflects a total Ohio tax liability (IT 1040, line 10 minus line 16) of $2,000. Last year, Joe's 2016 total Ohio tax liability (IT 1040, line 10 minus line 16) was $1,500. Joe had $1,000 withheld from his Ohio wages for tax year 2017, as reported on his W2. Joe did not have have a credit carryforward from his 2016 IT 1040, or any other refundable credits to claim against his 2017 total Ohio tax liability.

To determine if Joe owes an interest penalty, he would subtract his 2017 Ohio withholding ($1,000) from his 2017 total Ohio tax liability ($2,000), which the result is $1,000. Since this amount is greater than $500, Joe must now determine if his 2017 Ohio withholding and/or timely made estimated payments are greater than or equal to either 1) 100% of his 2016 total Ohio tax liability (which in his example is $1,500) or 2) 90% of his 2017 total Ohio tax liability, (which in this example is $1800 (.90 x $2,000)). Since Joe's 2017 withholding of $1,000 is less than both the $1,500 and the $1,800, he owes the interest penalty. Joe then enters the lesser of 90% of his 2017 Ohio tax liability or 100% of this 2016 Ohio tax liability on Part I, line 6 ($1,500 in this example). Joe will then calculate his interest penalty on Part II of the IT/SD 2210.

Part II of the IT/SD 2210 requires Joe to take the amount on Part I, line 6 ($1,500) and prorate it evenly over the four calendar quarters throughout the 2017 tax year (Part II, line 1). Then, Joe reduces his quarterly cumulative required installment by his 2017 Ohio withholding (Part II, line 2). The result of each subtraction (Part II, line 5) is then multiplied by the statutory ratio (Part II, line 6) and added together to determine his interest penalty. In this example, Joe's total interest penalty is $13.35 (Part II, line 8). To view an IT/SD 2210 completed with the information listed above, please click here.

 

SearchIcon