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A nonresident partner having other Ohio-sourced income may participate in the filing of Ohio form(s) IT 4708, but that nonresident partner must also file an Ohio income tax return (Ohio form IT 1040 for individuals; Ohio form IT 1041 for estates and trusts) to report all other Ohio-sourced income that is not reported
Who Should file the IT 1140? A qualifying PTE is required to file an IT 1140 when it is subject to withholding or entity tax on distributive shares of income issued to qualifying investors.
Who Should File Form IT 4708? The IT 4708 is a composite income tax return a PTE elects to file on behalf of its qualifying investors. It is filed in lieu of the IT 1140 Pass- Through Entity Trust Withholding Tax Return. An entity cannot file the IT 4708 if it has elected to file the IT 4738 for the taxable year.
The tax rate will change. The Ohio Department of Taxation reports: for taxable years beginning in 2022, the IT 4738 tax rate is 5%; For taxable years beginning in 2023 and later, the tax rate is equal to the tax rate imposed on taxable business income pursuant to R.C.
Annual Reconciliation of School District Income Tax Withheld (Ohio SD 141). Employers must also submit Ohio SD 141, which can be done electronically on the Ohio Business Gateway.
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Alternatively, a PTE may elect to file a composite return (OH DOT Form 4708) covering any or all of its owners (i.e., including both Ohio resident and nonresident owners) and paying tax for them at the highest marginal rate for nonbusiness income, which is currently 3.99%.
The IT 4738 is an entity level income tax return a PTE elects to file that includes all income of all owners of the EPTE. It is filed in lieu of the IT 1140 (the PTE withholding return). Similar to the IT 1140, an EPTE cannot use the IT 4738 to claim credits as shown on IT K-1s received from other PTEs.
Governor Mike DeWine signed HB 33, which, retroactive to January 1, 2023, gradually reduces the Ohio personal income tax rates over two years, collapsing the current four tax brackets to two by 2024.

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