Ohio Tax is embarking on a significant transformation of its internal software and taxpayer portal. It promises to bring a more user-friendly and modern experience to taxpayers and practitioners alike. This new system is live as of early September. Many details can be found on the new portal webpage: https://tax.ohio.gov/about/OHTAX.
Here are some key points to keep in mind about this software upgrade:
Rollout Phases: The changes will be rolled out in phases, with personal income and school district tax leading the way. Sales tax and other business taxes will follow approximately six months later. The goal is to transition all taxes to the new system by 2027, if not earlier.
Enhanced User Interface: The new interface aims to provide a modern banking-like experience, with features like web chat, AI assistance, screen sharing during agent interactions, viewing and responding to notices, and requesting penalty abatements. It will use OHID for login.
Benefits of Digitalization: Behind the scenes, increased digitalization and the elimination of manual processes will enable the department to do more with fewer resources. This change could also fine-tune the audit selection process.
Data Migration: While Ohio Tax reports that data conversions and the migration of taxpayer data have gone smoothly during testing, past experiences suggest there may be some lost records. This could potentially lead to issues with proper payment credit or even lost returns, resulting in notices. This is especially important for clients receiving credits from pass-through entities.
Defective Resident Credit and More
In addition to the new tax software, there are other important updates to be aware of:
Defective Resident Credit: The budget bill that passed this summer fixed a long-term problem that prevented Ohio owners from benefiting from other state’s pass-through entity election rules. Owners of multistate partnerships or S corporations may have additional tax-saving planning opportunities for tax year 2023.
Tax Assessment Changes: Ohio Tax is reconsidering plans to eliminate the requirement to send tax assessments by certified mail starting October 3, 2023. This change could save the state approximately $20 million in postage annually but would also result in some taxpayers (without updated addresses) not being notified of tax issues until the attorney general puts a lien on their house. If you decide to access their account through the e-services software, taxpayers need to be very careful to update their address in the state’s system and to also carefully consider if they want to sign up for electronic notifications. It’s a similar choice to when deciding if a credit card should send you a paper statement or just an electronic one.
We want to emphasize that we are here to support you through these changes. While not all information is available just yet, Rea continues to monitor developments closely and provide updates as they become available.
By Joe Popp (Dublin office)