Individual Income Tax Return Instructions - City Of Cincinnati

CITY OF CINCINNATI 2006

INDIVIDUAL INCOME TAX RETURN INSTRUCTIONS

Office Phone: (513) 352-2546

Website: -oh.gov/citytax

Mail to: 805 Central Ave Suite 600, Cincinnati OH 45202-5756

Returns must be filed by everyone required to submit a Declaration of Estimated Tax, even though Declaration was accurate and paid in full.

This form is to be used by individuals who receive income reported on federal forms W-2 or 1099-MISC or schedules C, E, F or K-1.

Please send us a copy of all federal forms used to compute your local tax and an itinerary of days worked outside Cincinnati, listing

dates and location if applicable. Individuals who file as Sole Proprietors or Single Member LLCs should also use this form.

General Information:

“Qualifying wages” generally include amounts reported in the Medicare wage base (the amount in Box 5 on the W -2) plus

supplemental unemployment compensation benefits paid pursuant to an employer sponsored plan and compensation of pre-1986

employees exempt from Medicare that is not in the Medicare wage base solely because of the Medicare grandfathering provision.

The due date for filing Net Profit returns is April 16

, 2007 or the 15

day of the fourth month following the fiscal year end.

Part A - Tax Calculation

LINE 1: Enter the total qualifying wages. If stock options are included on your W-2 in Box 5, deduct the amount paid in stock

option compensation to determine qualifying wages. Provide documentation of the stock options exercised. Attach copies of the

federal forms and schedules showing all reportable income with the return. For multiple W-2s complete Worksheet A on page 2.

LINE 2: Enter the amount of unreimbursed employee business expenses. You must include a copy of Federal Form 2106 or 2106EZ

to support the deduction.

LINE 3: Line 1 minus Line 2.

LINE 4: Part year or nonresidents only: Deduct the amount of gross wages included on Part A, Line 1 that were earned outside of

Cincinnati during the period when you were not a resident. If accurate records are not available, you may prorate your taxable income

by dividing the number of days lived in Cincinnati by the total days in the year. Include a schedule of calculations and an itinerary of

days worked outside Cincinnati, listing the dates and the location of the work site.

LINE 5: Line 3 minus Line 4.

LINE 6: Complete Worksheet B Business Income or Loss.

Schedule C- Business Income : Residents are subject to Cincinnati tax on all business income no matter where earned. Nonresidents

of Cincinnati must multiply the net profit or loss from each Schedule C using the apportionment percentage derived on Schedule Y to

determine the Cincinnati Taxable Income (Loss). Combine the profits and losses from all businesses reported on Schedule C.

Schedule E-Rental Income : Cincinnati residents report all profits or losses from rental property no matter where property is located.

Nonresidents of Cincinnati report profits or losses only from properties located within Cincinnati. Total monthly rents collected must

exceed $500 per month for this activity to be classified as a business (taxed on income or eligible to deduct losses).

Schedule K-1 – Partnership Income : The tax is levied on the partners, members or other owners of a flow-through entity excluding

S-Corporations. Businesses operating in Cincinnati are required to report the portion of net profit earned in Cincinnati and to remit the

tax on behalf of all their partners. Residents of Cincinnati are to report their distributive shares of income or loss that was not

withheld on by the business. The resident taxpayer may claim a credit for taxes paid to other localities by the business

Miscellaneous Income: Please provide documentation such as copies of federal schedules or Forms 1099-MISC not already reported

on Schedule C. Also taxable are all prizes, awards and income derived from gaming, wagering, lotteries or schemes of chance by

residents, regardless of where derived or by nonresidents from sources in the municipality and as reported on IRS Form W-2G, IRS

Form 5754 or any other form required by the Internal Revenue Service to report such prizes, awards and income. (1099s reporting

interest, dividends & retirement income are NOT taxable.)

NOL Carryforward: Enter the amount of net operating losses apportioned to Cincinnati. Operating losses may be carried forward

for a maximum period of five tax years. An explanatory schedule is required to support the carry-forward operating losses claimed on

the return.

Total Income (Loss): Add all the profits and deduct the losses in the Cincinnati Taxable Income column. Enter on Part A, Line 6.

Cincinnati taxable income is determined by multiplying the Cincinnati percentage indicated by the net profits from Schedules C, E, F,

K-1 or 1099. The Schedule Y- Business Apportionment Formula (CMC 311-7) on page 2 is completed by nonresidents who earn a

portion of their net profits in Cincinnati. (Refer to Regulation R-7 for complete details.)

Individual Income Tax Return Instructions - City Of Cincinnati - 2006

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