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Ohio Residency Changes for Tax Purposes

By: David J. Herbe Jr., CPA, MAcc- Tax Manager

The state of Ohio has issued an information release in regards to a change in the way they look at residency of a taxpayer. This is effective for tax years starting January 1, 2018. Below is a list of criteria that must be met to be considered a nonresident of Ohio. 

Providing irrebutable presumption that the taxpayer is of non-Ohio domicile (essentially the burden of proof to provide the state that the taxpayer is a nonresident).

All four criteria must be met:

1.       The individual(s) did not change their residence in or out of Ohio for the taxable year

2.       The individual files a statement with the state of Ohio that claims

          a.       They had less than 212 contact periods with Ohio for the taxable year

                       i.      A contact period is a time period of consecutive days when a resident stays overnight in Ohio away from their non-Ohio home. i.e. John was in Ohio Monday and Tuesday  this would be considered a contact period (one period). If John was in Ohio Monday and then left and came back to Ohio this would not be considered a contact period he is not staying overnight.

          b.      The individual has a home outside the state of Ohio for the full tax year

          c.       The individual doesn’t hold a driver’s license

          d.      The homestead exemption and/or owner-occupancy property tax was not claimed

3.       The statement can’t be false or misleading regarding the requirement above

4.       The statement must be filed on or before October 15th.

 One of the biggest changes that we found is the due date for the affidavit to be filed with the state of Ohio. The due date in prior years was May 30th; it has now changed to October 15th.

This will mostly apply to individuals who filed their tax return in Ohio as a resident last year but this year plan to file as a non-resident. It will also apply to individuals who have a home and spend a good chunk of time in Ohio but do not actually file or plan to file a tax return because they have no income sourced in the state. Really if there is believed to be a change in residency status that will raise any red flags with the Ohio Department of Taxation it may make sense to file the affidavit statement. It is a quick one page form that can be filed with the state department.

Should any questions arise concerning these new changes, Holbrook & Manter has plenty of experience in this area and would be glad to help!