If you received unemployment compensation and you qualify to exclude up to $10,200 of these benefits on your federal tax return, you will be able to exclude the same amount on your Ohio tax return.
If you filed your federal and Ohio tax returns without claiming the unemployment benefits deduction and you are entitled to this deduction, the IRS will automatically amend your federal tax return. See our article ‘Unemployment Compensation Exclusion‘ for additional information.
The State of Ohio will not automatically adjust a taxpayer’s return to exclude unemployment benefits. The State of Ohio provided the following guidance for taxpayers who are entitled to the unemployment benefits exclusion, but filed the federal and Ohio tax returns without the exclusion and are now waiting for the IRS to issue a refund.
After the IRS makes the adjustment, the taxpayer must do all of the following:
- File an amended Ohio IT 1040 (and an amended SD 100 for those who reside in a traditional tax base school district) to report your new federal adjusted gross income (AGI);
- Include a copy of your IRS Tax Account Transcript showing your new federal AGI, which are available at irs.gov/individuals/get-transcript or by calling 800-908-9946; AND
- Complete the Ohio Reasons and Explanation of Corrections (Ohio form IT RE or SD RE).
When completing the “Reasons and Explanation of Corrections” form, check the “Federal adjusted gross income decreased” box and list “Federal unemployment deduction refund” in the “Detailed explanation” section.
Please note, if you are required to file an amended return with the IRS related to your unemployment benefits (for example, to claim a credit you are now entitled to based on a reduced federal adjusted gross income), you must wait to file your amended Ohio IT 1040 (and amended SD 100, if applicable) until after your federal amended return has been accepted by the IRS.
Ohio Income Tax Update: Changes in how unemployment benefits are taxed.