Navigating Ohio’s PTE SALT Cap Form IT 4738

The Ohio Society of CPAs is offering a CPE webinar on Thursday, March 9 at noon to cover the new IT 4738 Form. Matt Dodovich, an attorney supervisor in the Tax Appeals Division at the Ohio Department of Taxation, will join Tom Zaino and Steve Hall from Zaino Hall & Farrin for the 50-minute presentation.  You can register for the CPE webinar by clicking here.  

The Ohio Department of Taxation on Jan. 20 released a third round of guidance for pass-through entities (PTEs) who “elect” to be subject to a new entity-level tax in response to the federal $10,000 SALT deduction cap limit placed on individuals.   

The ODT created the new Form IT 4738 after the enactment of OSCPA-supported Senate Bill 246, also known as Ohio’s version of the SALT cap deduction parity/workaround. The guidance includes a final version of the new IT 4738 form and instructions, a new payment coupon, and an additional 13 FAQs bringing the total to 33 FAQs. All of the prior guidance also can be found by clicking here.   

S.B. 246 authorizes PTE owners to claim a refundable credit against the owner’s Ohio income tax liability equal to the owner’s proportionate share of the tax paid by the PTE. IRS Notice 2020-75 permitted states to enact legislation to clarify that taxes paid by a PTE do not count towards an owner’s $10,000 SALT deduction cap limitation for federal income tax purposes. Twenty-nine states have addressed this issue, and three states have introduced bills. See the map of states with pending or enacted legislation.  

The CPE webinar is a great opportunity for tax practitioners to learn more about the new IT 4738 Form.  Click here to register for Thursday, March 9 at noon.