The Ohio joint filing credit is still not working correctly, I've checked all the conditions that are required.
Is there a workaround for this on turbotax
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It's working fine on my desktop Deluxe.
Be aware: there's a bunch of gotchas in the rules.
The income must be "qualifying" income. Typically only earned income (e.g. wages), unemployment and retirement income are qualifying income. Interest, dividends, capital gains and rental income do not count. (the latest instructions say everything is qualifying except those 4 items)
From the instructions:
“To qualify for this credit, you and your spouse must each have at least $500 of qualifying income and jointly file your return. "Qualifying income" is any amount included in Ohio adjusted gross income, other than the following:
●Interest;
●Dividends and distributions;
●Capital gains; AND
●Rents and royalties”
“Amounts deducted on the Ohio Schedule of Adjustments are not included in Ohio adjusted gross income, and thus are not "qualifying income." Examples of such amounts include business income, state and local tax refunds, Social Security and railroad retirement benefits, and certain military compensation and retirement benefits.”
Fairly new is the 100% Small business Deduction (SBD). If one of the spouses is self employed, all of his/her qualifying income for the Joint Filing Credit (JFC) is wiped out by the SBD. But, you are not required to take the full 100% SBD. So, you can consider reducing the amount of SBD you claim, so that you have at least $500 of earned income to claim the JFC.
Then, any Ohio schedule A deductions (like excess medical expenses, 529 contributions) or Federal adjustments (the most common being an IRA deduction) must be subtracted from the qualifying income. If either spouse has less than $500 net, you will not qualify for the Joint filing credit. Take a look at the allocation form that TT does, it should show these adjustments.
In the "forms mode", look at the Joint Filing Credit Allocation Worksheet.
This is where your net qualifying income is calculated. It shows on line 4. If either of you is less than $500 on line 4, you do not qualify. Then, you can look at adjusting you allocations, where allowed, to get the credit . A good example is to forgo taking some of your medical deduction (or shifting some of the medical deduction to the other spouse), because the Joint Filing Credit is a bigger tax break than the medical deduction.
Ohio Individual Income Tax IT 1040 Instructions, page 29, states:
The credit equals a percentage of your tax liability prior to the application of the credit. The maximum credit per return is $650.
Please clarify how the Ohio joint filing credit is not working correctly. Thank you.
It's working fine on my desktop Deluxe.
Be aware: there's a bunch of gotchas in the rules.
The income must be "qualifying" income. Typically only earned income (e.g. wages), unemployment and retirement income are qualifying income. Interest, dividends, capital gains and rental income do not count. (the latest instructions say everything is qualifying except those 4 items)
From the instructions:
“To qualify for this credit, you and your spouse must each have at least $500 of qualifying income and jointly file your return. "Qualifying income" is any amount included in Ohio adjusted gross income, other than the following:
●Interest;
●Dividends and distributions;
●Capital gains; AND
●Rents and royalties”
“Amounts deducted on the Ohio Schedule of Adjustments are not included in Ohio adjusted gross income, and thus are not "qualifying income." Examples of such amounts include business income, state and local tax refunds, Social Security and railroad retirement benefits, and certain military compensation and retirement benefits.”
Fairly new is the 100% Small business Deduction (SBD). If one of the spouses is self employed, all of his/her qualifying income for the Joint Filing Credit (JFC) is wiped out by the SBD. But, you are not required to take the full 100% SBD. So, you can consider reducing the amount of SBD you claim, so that you have at least $500 of earned income to claim the JFC.
Then, any Ohio schedule A deductions (like excess medical expenses, 529 contributions) or Federal adjustments (the most common being an IRA deduction) must be subtracted from the qualifying income. If either spouse has less than $500 net, you will not qualify for the Joint filing credit. Take a look at the allocation form that TT does, it should show these adjustments.
In the "forms mode", look at the Joint Filing Credit Allocation Worksheet.
This is where your net qualifying income is calculated. It shows on line 4. If either of you is less than $500 on line 4, you do not qualify. Then, you can look at adjusting you allocations, where allowed, to get the credit . A good example is to forgo taking some of your medical deduction (or shifting some of the medical deduction to the other spouse), because the Joint Filing Credit is a bigger tax break than the medical deduction.
Thank you for the detailed response. That will be helpful for me next year.
It appears to me that Ohio has now added gaming income to the list of incomes that are not qualified to get the Ohio joint credit.
But I will also investigate the other. I'm going to take a small withdrawal from my wife's IRA because I know that's qualifying income for next year.
Thanks again, sounds like you really know your taxes!
Instead of an IRA withdrawal, you may want to consider a Roth IRA conversion. That qualifies and switches your money from tax deferred to tax free.
You said It appears to me that Ohio has now added gaming income to the list of incomes that are not qualified to get the Ohio joint credit.
That would make sense, but when I tested it on TT, it did allow the gambling income as qualified.
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