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 much bonus depreciation am I required to addback?

The amount of the addback depends on a few different circumstances.  First, the taxpayer must compute the amount of federal depreciation subject to addback.  This amount is the taxpayer’s total §179 expense less $25,000 plus all of the taxpayer’s §168(k) depreciation expense. 

Example:  Mark has $125,000 of section 179 depreciation expense and $80,000 of section 168(k) depreciation expense included in his FAGI for tax year 2016.  The deprecation is from his ownership in ABC LLC.  Mark’s total amount of depreciation subject to addback is calculated as:

  • (§179 - 25,000) + §168k = Depreciation subject to addback
  • ($125,000 – 25,000) + $80,000 = $180,000

Pursuant to O.R.C. 5747.01(A)(20)(a), the amount subject to addback is then multiplied by one of the following fractions:

  • 6/6 if the entity, in the year of the depreciation expense, had a net operating loss (NOL) and the loss would not have happened without the depreciation expense;
  • 2/3 if the entity, in the year of the depreciation expense, increased its Ohio tax withholding by at least 10% over the previous year; or
  • 5/6 for all other taxpayers.

Example:  Mark’s depreciation subject to addback is $180,000.  Mark did not have an NOL, nor did ABC LLC have any changes in its Ohio withholding amounts.  Generally, Mark would calculate his deprecation addback as:

  • 5/6 x $180,000 = $150,000

However, if ABC LLC had increased its Ohio tax withholding for its employees by at least 10% over its Ohio tax withholding for 2015, Mark would calculate his deprecation addback as:

  • 2/3 x $180,000 = $120,000

Finally, if ABC LLC had an NOL for tax year 2016 because of the accelerated depreciation, Mark would calculate his depreciation addback as:

  • 6/6 x $180,000 = $180,000

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