FAQs - Pass Through Entity

Many PTEs can file either Ohio form IT 4708 or IT 1140. Since actual payments can be transferred from one return to the other for the same taxpayer, shouldn't the tax due computed on both returns be the same?

No. The Ohio taxable income on form IT 4708 is taxed at the highest individual income rate of tax set forth in Ohio Revised Code Section 5747.02. Ohio Revised Code Section 5747.41 states that the IT 1140 tax rate is only 5% for qualifying investors who are individuals. While some maintain that the rates should be the same, the law does not provide for the same rates.