Insights

With the passage of H.B. 508, Ohio has changed the way taxpayers account for the $1 million dollar exclusion. In the past, taxpayers took $250,000 of the exclusion each quarter and carried forward any unused portion for up to three future quarters. The new methodology forces the taxpayer to use the full $1 million dollar exclusion in the first quarter and carry forward the unused portion to the remaining three calendar quarters. This administrative change eliminates the ability to use more than $1 million of exclusion in the same calendar year.

If you happen to be a taxpayer that was a calendar-year filer and you breach $1 million dollars in Ohio gross receipts, you must take the full $1 million dollar exclusion on the first quarterly return filed. You may however carry forward the unused portion to the other quarters within the same calendar year.

The change does not take effect until January 1, 2013. Any exclusion amounts carried forward to 2012 from calendar year 2011 must be used prior to 2013.

If you have questions about using your CAT exclusion, please contact Mark Rossetti in the SALT group at (614) 586-7234.

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This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax related matter.

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