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ODT issues updated guidance on unemployment benefits deduction

Written on May 27, 2021

The Ohio Department of Taxation has issued an important alert this week for taxpayers who filed federal and Ohio tax returns without the unemployment benefits deduction and who are waiting for the IRS to issue a refund. 

After the IRS makes the adjustment, the taxpayer must: 

  1. File an amended Ohio IT 1040 (and an amended SD 100 for those who reside in a traditional tax base school district) to report their new federal adjusted gross income (AGI);
  2. Include a copy of their IRS Tax Account Transcript showing their new federal AGI, available at irs.gov/individuals/get-transcript or by calling 800.908.9946; AND 
  3. Complete the Ohio Reasons and Explanation of Corrections (Ohio form IT RE or SD RE). 

When completing the “Reasons and Explanation of Corrections” form, check the “Federal adjusted gross income decreased” box and list “Federal unemployment deduction refund” in the “Detailed explanation” section. 

This week’s alert comes as an addendum to guidance issued last month, Ohio Income Tax Update: Changes in how Unemployment Benefits are taxed for Tax Year 2020. ODT at that time said it would issue additional guidance when more details were available from the IRS. Those details arrived recently from the IRS, allowing Ohio to act. 

Taxpayers who are required to file an amended return with the IRS related to unemployment benefits must wait to file an amended Ohio IT 1040 (and amended SD 100, if applicable) until after their federal amended return has been accepted by the IRS. 

For more information, visit tax.ohio.gov/emailus or call 800.282.1780 (TTY: 800.750.0750).