Instructions For Ohio Form Ft 1120fi - Ohio Corporation Franchise Tax Report

effective date of the amendment to the credit enacted by Amended

The amount of the credit with respect to credit agreements that

Substitute House Bill 1 (HB 1), 128

General Assembly, the credit

are entered into before Oct. 16, 2009 equals the amount of Ohio

is computed as a percent of the growth in income tax withholding

income tax the taxpayer withheld from compensation paid to “new

at the project site over the taxpayer’s baseline withholding for that

employees” during the taxpayer’s taxable year multiplied by the

year. Speciﬁ cally:

percentage speciﬁ ed in the taxpayer’s agreement with the Tax Credit

Authority. The refundable new jobs credit is treated as a payment

− The credit is computed as a percent (as stated in the agreement

made on Jan. 1 of the tax year.

between the taxpayer and the tax credit authority) of the amount

by which (i) income tax withheld from employees at the project

The term “new employee” means a full-time employee ﬁ rst employed

site during the taxable year exceeds (ii) the taxpayer’s baseline

by the taxpayer in the project that is the subject of the tax credit

withholding at the project site for that taxable year.

agreement after the taxpayer enters into the agreement. New

employees include employees hired after the Tax Credit Authority

− Withholding includes the sum of Ohio and school district income

approves the taxpayer’s project but before the taxpayer signs the

tax withheld from all employees at the project site during the

tax credit agreement with the Tax Credit Authority as long as the

taxable year regardless of whether the employee is a “new”

taxpayer signs the agreement within 60 days after receiving the

employee and regardless of whether the employee is a full-

agreement from the ODOD. If the authority determines it appropriate,

time employee.

a “new employee” also may include an employee rehired or called

back from lay-off to work in a new facility or on a new product or

Baseline withholding. For JCTC agreements entered into on or

service.

after Oct. 16, 2009, the taxpayer’s baseline withholding for the ﬁ rst

year of the credit agreement equals the sum of Ohio and school

Taxpayers claiming the new jobs credit must submit a copy of

district income tax withheld by the taxpayer from all the taxpayer’s

the director of development’s certiﬁ cate of veriﬁ cation with the

employees at the project site during the 12 months immediately

taxpayer’s tax report for the taxable year. However, the law also

preceding the date that the tax credit authority approved the

provides that failure to submit a copy of the certiﬁ cate with the report

taxpayer’s application multiplied by the sum of one plus the

does not invalidate a claim for the credit if the taxpayer submits

taxpayer’s pay increase factor. However, if for the ﬁ rst year of the

a copy of the certiﬁ cate to the commissioner within 60 days after

agreement the taxpayer is credit eligible for only a portion of the year,

the commissioner requests it. See R.C. 122.17(H) as amended by

the taxpayer’s baseline withholding for the ﬁ rst year is reduced in

House Bill 530, 126

Ohio General Assembly.

proportion to the number of days the taxpayer was not credit eligible.

Thus, if the taxpayer is credit eligible for only a portion of the ﬁ rst

If a taxpayer claims the refundable new jobs credit with respect to

year of an agreement entered into on or after Oct. 16, 2009, then

an employee, the taxpayer may not claim the nonrefundable R.C.

baseline withholding for the ﬁ rst year is determined by multiplying

5709.66 enterprise zone new employee credit with respect to the

the proportionately reduced withholding by the sum of one plus the

same employee.

pay increase factor.

The Tax Credit Authority and the ODOD administer the JCTC. Tax

Baseline withholding for year two of the agreement is determined by

credit agreement application forms are available from the ODOD,

multiplying (i) the “unreduced” baseline amount for the ﬁ rst year by

Strategic Business Investment Division, Ofﬁ ce of Grants and Tax

(ii) the sum of one plus the pay increase factor. (Note: The unreduced

Incentives, P.O. Box 1001, Columbus, Ohio 43216-1001. The street

baseline amount for the ﬁ rst year equals the sum of Ohio and school

address for the ODOD is 77 S. High Street, 28th ﬂ oor, Columbus,

district income tax withheld from all employees at the project site

Ohio 43215. For additional information please visit the ODOD’s

during the 12 months immediately preceding the date that the tax

Web site at development.ohio. gov/Business/JCTC or call (614)

credit authority approved the taxpayer’s application multiplied by

466-2317, (614) 466-4551 or (800) 848-1300.

the sum of one plus the pay increase factor.)

2. Refundable credit for tax withheld by the Ohio Lottery

Baseline withholding for year three and for each subsequent

Commission.

year of the agreement is determined by multiplying the previous

Enter the amounts the Ohio Lottery Commission withheld from its

year’s baseline amount by one plus the pay increase factor. The

payments to the taxpayer pursuant to R.C. 5747.062(B)(2). See

pay increase factor is an assumed annual rate that payroll at the

R.C. sections 3770.072(B), 5747.062(B)(2) and 5733.98(A)(33)

project site will increase from one year to the next. The taxpayer’s

for more information.

pay increase factor is determined by the authority and remains

Refundable credit for losses on loans made to the Ohio Venture

constant throughout the term of the agreement.

Capital (OVC) Program. (R.C. 150.01 to 150.10, 5733.49, 5733.98,

HB 1 also amended the required contents of a JCTC agreement

5747.80 and 5747.98)

along with the term during which the taxpayer must maintain

The refundable credit for losses on loans made to the Ohio Venture

operations at the project location in order to avoid repaying the

Capital (OVC) Program does not appear on the 2012 Ohio franchise

credit or a portion of the credit. See the ODOD’s administrative rules

tax report (or on the 2011 individual income tax return) because

122:7-1-01 through 06 and R.C. 122.17 as amended by the bill. For

no credit certiﬁ cates were issued for the tax year. The purpose of

additional information regarding the JCTC and HB 1’s amendment

the credit is to provide OVC lenders and investors some security

to the JCTC, please visit the ODOD’s Web site at development.

against losses on their loans to the program

ohio.gov/business/jctc or call (614) 466-4551 or (800) 848-1300

Substitute Senate Bill 321, 126

Ohio General Assembly, made the

For credit agreements entered into before the Oct. 16, 2009

credit for losses on loans made to the Ohio Venture Capital Program

effective date, prior law applies and the credit is computed only

refundable. Under prior law the taxpayer had a choice of taking this

with respect to Ohio income tax amounts withheld from “new”

credit as a refundable credit or as a nonrefundable credit.

full-time employees at the project site. The instructions that follow

3. Refundable Ohio historic preservation credit. (R.C. 149.311).

apply to credit agreements that are entered into before Oct. 16,

Administered by the ODOD, the refundable historic preservation

2009.

- 19 -

Instructions For Ohio Form Ft 1120fi - Ohio Corporation Franchise Tax Report - 2012 Page 20

Related Articles

Related forms

Related Categories