Ohio nonresident return tax more than what I earned

[Bob-B]

I have to file an OH nonresident return because I have rental property in Ohio.  I made a $3 dollar profit on my Ohio rental, yet Turbotax indicates that I owe $10 tax for my $3 Ohio earnings.  How can I owe more in tax than what I earned when all of my other income should not be considered by Ohio since that income is related to MA where I'm a resident?

[Hal_Al]

You most likely made an entry error.

Ohio does a convoluted tax calculation for non-residents/part year residents. It calculates tax on total income, then it calculates a non resident/part year resident credit, which it subtracts from the tax it calculated on the total income. The credit is calculated as your non-Ohio income divided by Total adjusted Income multiplied by the total tax. TurboTax (TT)   does this by allocating your income as either Ohio or non-Ohio. W-2 income will be allocated by the state name abbreviation shown in box 15 of your W-2. TT will ask you, item by item, in the state section, how much of your other income is Ohio or non-Ohio income. Make sure that your non-Ohio wages show MA (Other state postal abbreviation)  in box 15 of your W-2 screen, with the MA amount in box 16.

I see you have download software. Ohio has a nonresident credit allocation form.. IT NRC. You may find it easier to make you allocation entries on form IT NRC, rather than trying to get the interview right

http://www.tax.ohio.gov/portals/0/forms/ohio_individual/individual/2017/PIT_ITNRC.pdf 

[Bob-B]

On IT NRC, the only Ohio Portion is the $3.

[Hal_Al]

Look at the Ohio Schedule of credits, lines 26-28.

[Bob-B]

I found the reason.  It was adding a MA state refund and I had to set it to a "non-Ohio additions to income".  Turbotax is a bit confusing because there are multiple places where I have to set the same thing to non-Ohio or Ohio.  I had previously entered that the Ohio portion of state refund was 0 but I again have to enter it as "non-Ohio additions to income".   I appreciate Hal's assistance.

[cparke3]

I am a bit confused about on aspect of Section III (page 3) of the Ohio IT-NRC non-resident credit from.

The form asks for percentage of ownership, and then performs apportionment between "Within Ohio" and "Everywhere".

My question is if the amounts entered in the columns are the full passthru entity's amounts, or just my percentage of those amounts?

For example, if I own 2% of the entity, and the entity payroll was $1,000,000 Everywhere and $100,000 in Ohio, would I be entering those numbers or $20,000 and $2,000 (2% thereof) on the form?  I realize either set of values will produce the same percentage, but I'm just not clear which the Ohio Dept. of Taxation is expecting these numbers to represent?

[LenaH]

Section III of the Ohio IT-NRC should reflect your percentage of amounts from pass-through entities. According to the code, amounts should include "the person's entire distributive share or proportionate share of the items of business income, nonbusiness income, adjusted qualifying amounts, allocable income or loss, apportionable income or loss, property, compensation, and sales of any pass-through entity in which the person has a direct or indirect ownership interest at any time during the person's taxable year".

@cparke3 

[cparke3]

"... your percentage of amounts from pass-through entities"

Yes, of course - but that wasn't exactly the question. 

There are two percentages involved here:

1) The percentage of ownership in the pass-thru entity, and thus your share property, payroll, and sales.

2) The apportionment ratio of that business income to Ohio.

Section III of the Ohio IT-NRC asks for the percentage of ownership at the top, but if I'm then supposed to provide my share of the amounts, it puzzles me why they would care to know that percentage is? 

My question now is If the amounts to be provided on this Ohio form, used to determine the Ohio apportionment ratio, are to be already reduced by the percentage at the top.  Again, you'd get the same apportionment ratio either way, but it's really just a question if Ohio wants the bigger or smaller numbers on this form.