Ohio deparment of taxation

Individual I file

Individual tax forms

What’s New for 2012

A number of changes to the Ohio individual income tax took effect this year, and some of them will save taxpayers money. Among the key changes for 2012:

• Income Tax Online Services. Create a user name and password through our secure site for the following self-help services:
• Electronically view your 1099-G and/or 1099-INT form(s)
• Go paperless with your 1099-G and/or 1099-INT form(s) (confirmed e-mail address required)
• Update your profile to include:  Address, phone number and e-mail address

For more information on these new services, as well as information on your electronic file and pay options, go to our Web site at tax.ohio.gov.

• HB 508. In June 2012 the governor signed HB 508, which includes the following:

• Requires electronic filing for paid preparers that file 12 or more returns during any calendar year that begins on or after Jan. 1, 2013 (if they filed 11 or more returns in the previous year).
• Gives the tax commissioner the ability to send tax notices electronically.
• Expands the $50 penalty for dishonored/declined payments to now include those that are paid electronically.

• HB 365. Upon the governor’s signature, HB 365 expands the 179/168 add-backs and deductions.

• Expansion of Job Creation and Retention Credit. On June 6, 2012, the governor signed HB 327 expanding the job creation and retention credit to now include home-based employees when calculating the credit. See HB 327 for additional information.

• Estimated Payment Vouchers. Taking yet another step to streamline operations and reduce costs, the Ohio Department of Taxation will no longer mail its estimated payment vouchers (Ohio forms IT 1040ES and SD 100ES). Taxpayers may pay their quarterly 2013 Ohio and/or school district estimated income tax by using any of our electronic payment methods. Taxpayers may also go to our Web site at tax.ohio.gov to print copies of our forms.

• E-Mail Notification. The Ohio Department of Taxation has created a space on its Ohio form IT 1040 and IT 1040EZ that allows the taxpayer to fill out an e-mail address. Also, through our new Online Services, you are able to provide, update and select “e-mail” as your preferred method of communication with the department for certain notices. No confidential information will be included in e-mail communications.

• Filing Deadline  — The deadline for filing your Ohio (and federal/IRS) 2012 income tax return is April 15, 2013.
• Pell Grant and Ohio College Opportunity Grant Deduction — Ohio taxpayers may now be eligible for a deduction of limited taxable grant amounts.

• Ohio Income Tax Tables. Ohio’s individual income tax brackets have been indexed for inflation per Ohio Revised Code section 5747.025. The income tax brackets reflect a 2.1% reduction compared to taxable year 2011.

• Direct Deposit — Changes to Ohio law permit taxpayers who file an Ohio income tax return electronically to also deposit their refund electronically into any of four different types of pre-existing accounts, including checking accounts, savings accounts, individual retirement accounts or annuities (“IRAs”) and CollegeAdvantage 529 Savings Accounts administered by the Ohio Tuition Trust Authority. Direct deposit options for electronic filing allow taxpayers to split direct deposits into three different accounts.
• Larger personal exemption — The personal and dependent income tax exemption increased to $1,700 for the 2012 taxable year, $50 more than 2011.

• Low Income Tax Credit. Taxpayers whose Ohio taxable income is $10,000 or less are entitled to a tax credit that results in a zero tax liability.

Roth conversions in 2010 from traditional IRAs are shown on 2012 Form 1040, Line 15b, or Form 1040A, Line 11b. Conversions from workplace retirement plans, including in-plan rollovers to designated Roth accounts, are reported on Form 1040, Line 16b, or Form 1040A, Line 12b.

Taxpayers who also received Roth distributions in either 2010 or 2011 may be able to report a smaller taxable amount for 2012. For details, see the discussion under 2012 Reporting of 2010 Roth Rollovers and Conversions on IRS.gov. In addition, worksheets and examples can be found in Publication 590 for Roth IRA conversions and Publication 575 for conversions to designated Roth accounts.

Taxpayers who made Roth conversions in 2012 or are planning to do so in 2013 or later years must file Form 8606 to report the conversion.

As in 2010 and 2011, income limits no longer apply to Roth IRA conversions.

Source

The IRS is modifying several eligibility requirements, thus making it possible for many more interested employers, especially larger ones, to apply for this program. Thus far, nearly 1,000 employers have applied for the VCSP, which provides partial relief from federal payroll taxes for eligible employers who are treating their workers or a class or group of workers as independent contractors or other nonemployees and now want to treat them as employees. Businesses, tax-exempt organizations and government entities may qualify.

Under the revamped program, employers under IRS audit, other than an employment tax audit, can qualify for the VCSP. Furthermore, employers accepted into the program will no longer be subject to a special six-year statute of limitations, rather than the usual three years that normally applies to payroll taxes. These and other permanent modifications to the program are described in Announcement 2012-45 and in questions and answers, posted on IRS.gov.

Normally, employers are barred from the VCSP if they failed to file required Forms 1099 with respect to workers they are seeking to reclassify for the past three years. However, for the next few months, until June 30, 2013, the IRS is waiving this eligibility requirement. Details on this temporary change are in Announcement 2012-46.

To be eligible for the VCSP, an employer must currently be treating the workers as nonemployees; consistently have treated the workers in the past as nonemployees, including having filed any required Forms 1099; and not currently be under audit on payroll tax issues by the IRS. In addition, the employer cannot currently be under audit by the Department of Labor or a state agency concerning the classification of these workers or contesting the classification of the workers in court.

Interested employers can apply for the program by filing Form 8952, Application for Voluntary Classification Settlement Program, at least 60 days before they want to begin treating the workers as employees.

Employers accepted into the program will generally pay an amount effectively equaling just over one percent of the wages paid to the reclassified workers for the past year. No interest or penalties will be due, and the employers will not be audited on payroll taxes related to these workers for prior years. Employers applying for the temporary relief program available for those who failed to file Forms 1099 will pay a slightly higher amount, plus some penalties, and will need to file any unfiled Forms 1099 for the workers they are seeking to reclassify.

The VCSP is a voluntary program that provides an opportunity for taxpayers to reclassify their workers as employees for employment tax purposes for future tax periods with partial relief from federal employment taxes. To participate in this voluntary program, the taxpayer must meet certain eligibility requirements and apply to participate in the VCSP by filing Form 8952, Application for Voluntary Classification Settlement Program, and enter into a closing agreement with the IRS.

The VCSP allows eligible taxpayers to obtain relief similar to that currently available through the Classification Settlement Program for taxpayers under examination.

The VCSP, originally released in Announcement 2011-64, has been modified in Announcement 2012-45 to:

• Permit a taxpayer under IRS audit, other than an employment tax audit, to be eligible to participate in the VCSP
• Clarify the current eligibility requirement that a taxpayer who is a member of an affiliated group within the meaning of section 1504(a) is not eligible to participate in the VCSP if any member of the affiliated group is under employment tax audit
• Clarify that a taxpayer is not eligible to participate if the taxpayer is contesting in court the classification of the class or classes of workers from a previous audit by the IRS or Department of Labor; and
• Eliminate the requirement that a taxpayer agree to extend the period of limitations on assessment of employment taxes as part of the VCSP closing agreement with the IRS.

Announcement 2012-45 (2012-51 I.R.B. 724) provides notice and information about the revised program.

Eligibility

The VCSP is available for taxpayers who want to voluntarily change the prospective classification of their workers. The program applies to taxpayers who are currently treating their workers (or a class or group of workers) as independent contractors or other nonemployees and want to prospectively treat the workers as employees.

A taxpayer must have consistently treated the workers as independent contractors or other nonemployees, and must have filed all required Forms 1099 for the workers to be reclassified under the VCSP for the previous three years to participate. However, see the heading below, “VCSP Temporary Eligibility Expansion,” for a temporary expansion to eligibility for the VCSP.

Additionally, the taxpayer cannot currently be under employment tax audit by the IRS and the taxpayer cannot be currently under audit concerning the classification of the workers by the Department of Labor or by a state government agency.

If the IRS or the Department of Labor has previously audited a taxpayer concerning the classification of the workers, the taxpayer will be eligible only if the taxpayer has complied with the results of that audit and is not currently contesting the classification in court.

Exempt organizations and government entities may participate in VCSP if they meet all of the eligibility requirements.

VCSP Agreements

A taxpayer participating in the VCSP will agree to prospectively treat the class or classes of workers as employees for future tax periods. In exchange, the taxpayer will:

• Pay 10 percent of the employment tax liability that would have been due on compensation paid to the workers for the most recent tax year, determined under the reduced rates of section 3509(a) of the Internal Revenue Code. See VCSP FAQ 15, for information on how payment under the VCSP is calculated. Also see Instructions to Form 8952;
• Not be liable for any interest and penalties on the amount; and
• Not be subject to an employment tax audit with respect to the worker classification of the workers being reclassified under the VCSP for prior years.

Applying for VCSP

To participate in the VCSP, a taxpayer must apply using Form 8952, Application for Voluntary Classification Settlement Program. The application should be filed at least 60 days prior to the date the taxpayer wants to begin treating its workers as employees. The IRS will make every effort to process Form 8952 with sufficient time to allow for the voluntary reclassification on the requested date.

Along with the application, the taxpayer may provide the name of a contact or an authorized representative with a valid Power of Attorney (Form 2848).  However, the taxpayer, and not the taxpayer’s representative, is required to sign Form 8952. The IRS will contact the taxpayer or authorized representative to complete the process after reviewing the application and verifying the taxpayer’s eligibility.

Eligible taxpayers accepted into the VCSP will enter into a closing agreement with the IRS to finalize the terms of the VCSP, and will simultaneously make full and complete payment of any amount due under the closing agreement.

VCSP – Temporary Eligibility Expansion (VCSP TEE)

Announcement 2012-46 (2012-51 I.R.B. 725) provides notice and information regarding a temporary expansion of eligibility for the VCSP that will be available through June 30, 2013. The temporary eligibility expansion makes a modified VCSP available to taxpayers who would otherwise be eligible for the current VCSP, but who have not filed all required Forms 1099 for the previous three years with respect to the workers to be reclassified.

Like the VCSP, the VCSP TEE permits eligible taxpayers to voluntarily reclassify their workers as employees for federal employment tax purposes and obtain relief similar to that obtained through the current Classification Settlement Program. Payment due under the VCSP TEE is higher than the payment under the VCSP, but the benefits are otherwise the same for taxpayers who participate.

To participate in the VCSP TEE, the taxpayer must meet certain eligibility requirements, apply on or before June 30, 2013, and enter into a closing agreement with the IRS. Taxpayers who would otherwise be eligible for the current VCSP, but have not filed all required Forms 1099 for the previous three years with respect to the workers to be reclassified are eligible for the VCSP TEE. In addition, once a taxpayer is deemed eligible to participate, they must furnish to the workers and electronically file all required Forms 1099 for the workers being reclassified for the previous three years prior to executing the VCSP TEE closing agreement with the IRS. The IRS will provide instructions on how to electronically file Forms 1099 once it has reviewed the taxpayer’s application and verified that the taxpayer is otherwise eligible.

VCSP TEE Agreements

A taxpayer participating in the VCSP TEE will agree to prospectively treat the class or classes of workers as employees for future tax periods. In exchange, the taxpayer will:

• Pay 25 percent of the employment tax liability that would have been due on compensation paid to the workers for the most recent tax year, determined under the reduced rates of section 3509(b) of the Internal Revenue Code;
• Not be liable for any interest and penalties on the liability;
• Pay a reduced, graduated penalty for unfiled Forms 1099 for the previous three years for the workers being reclassified (see the worksheet provided with Announcement 2012-46, 2012-51 I.R.B. 725); and
• Not be subject to an employment tax audit with respect to the worker classification of the workers being reclassified for prior years.

The taxpayer must certify as part of the VCSP TEE closing agreement with the IRS that it has furnished to the workers and has electronically filed all required Forms 1099, as instructed by the IRS, for the previous three years.

Applying for VCSP TEE

Eligible taxpayers who want to participate in the VCSP TEE must submit Form 8952, Application for Voluntary Classification Settlement Program (VCSP), on or before June 30, 2013. When applying for the VCSP TEE, applicants must:

• Write “VCSP Temporary Eligibility Expansion” at the top of Form 8952;
• Put a line through Part V, Line A3, to indicate that the applicant has not satisfied all Form 1099 requirements for each of the workers for the three preceding calendar years ending before the date of the application; and
• Not complete Part IV, Payment Calculation. Instead, taxpayers should complete and attach the worksheet provided in Announcement 2012-46 to calculate their payment under the VCSP TEE.

Along with the application, the taxpayer may provide the name of a contact or an authorized representative with a valid Power of Attorney (Form 2848). However, the taxpayer, and not the taxpayer’s representative, is required to sign Form 8952. The IRS will contact the taxpayer or authorized representative to complete the process after reviewing the application and verifying the taxpayer’s eligibility.

Source

The Minnesota Department of Revenue’s Terri Steenblock and Vicki Dickinson introduce the department’s new and improved "e-Services" for business taxpayers in this department video. Using locator graphics such as circles and arrows to highlight points of interest, they walk you through many of the system’s new features. Those include its simplified color scheme, less-cluttered layout and easier-to-follow instructions. The new e-Services debuts Monday.

Steenblock is assistant commissioner of individual taxes, and Dickinson is the department’s integrated tax system director.

Even after rolling out the new e-Services, we’ll continue to listen to user suggestions about how to make it even better. e-Services allows business taxpayers to handle virtually all their tax business with just a few clicks of the keyboard.

For more information about e-Services, visit the Department of Revenue website at http://revenue.state.mn.us or email dorweb.comm@state.mn.us

Businesses: http://www.revenue.state.mn.us/businesses/Pages/e-Services.aspx

Tax Professionals: http://www.revenue.state.mn.us/tax_prof/Pages/e-Services.aspx

Local Governments: http://www.revenue.state.mn.us/local_gov/Pages/e-Services.aspx

Individuals: http://www.revenue.state.mn.us/individuals/individ_income/Pages/eServices_for_individuals.aspx

This presentation was recorded at the Minnesota Department of Revenue on Monday, February 25, 2013.

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This video takes a look back at the MALMC 2012 Conference.

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This video gives information about providing data from QuickBooks and similar software products for your Missouri sales and use tax audit.

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Find out why the cost of your health insurance is on your W-2. Learn more at irs.gov.

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Tax Commissioner Cory Fong talks about the Free Fillable Forms system available to North Dakota taxpayers who want to e-file their North Dakota individual income tax return.

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Visit the Missouri Department of Labor’s Worker Protection Center: http://labor.mo.gov/workerprotection/. If you need to file for representation or just want more information about it please visit this website: http://labor.mo.gov/sbm/Petitions/file_petition.asp.

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