January 14, 2019

Ohio Adopts New Rule for State Electronic Filing

By Mary Jo Dolson, Partner, Tax & Business Services

Ohio Adopts New Rule for State Electronic Filing State & Local Tax

A new state e-filing requirement will affect the upcoming tax filing season in Ohio. Under the “10 Business Day Rule,” users and customers of software tax preparation products will be required to download and apply software updates if they e-file 10 or more days after the product release.

The new rule, which is the result of the National Association of Computerized Tax Processors and the Federation of Tax Administrators, was made to establish a more consistent standard and to help reduce the rate of errors that occur when returns are filed without incorporating the latest software updates. Each state sets its own specific standards for working with software vendors, and this change will be executed among all software companies.

Currently, Ohio is among 33 states, including Kentucky, Pennsylvania and West Virginia, to have adopted this requirement. Florida has currently not adopted this requirement. Many of the remaining states are expected to follow suit.

The following is an example of how the new rule would work for an Ohio state return:

  • March 4 – Return is created on software version 2.8, which contains a change to Ohio.
  • March 5 – Return is calculated as version 2.8.
  • March 8 – Return is exported to electronic filing, and Form 8879 is sent for taxpayer signature.
  • March 11 – Software version 2.9 is released, also containing a change to Ohio.
  • March 15 – Form 8879 is received from taxpayer and return is released to Ohio from the electronic filing framework. This falls within the 10-day version of the version 2.9 release, so this would be acceptable for Ohio.
  • March 23 – All returns on version 2.8 must be recalculated using version 2.9 prior to electronic filing. Even though March 23 is a Saturday, this is after the 10 business day window from the 2.9 release, as March 22 was the 10th business day after release.

Note that if Version 2.9 did not contain an update for Ohio, these dates would not apply because Version 2.8 is still the most updated version of the tax software for Ohio.

What to Expect From Marcum
Marcum will utilize filters that will identify returns that are nearing this 10 business day expiration window. Returns saved from the prior updates that will need to be updated will be periodically recalculated so as to meet these new requirements.

If you have any questions on the new 10 Business Day Rule, or any other state and local (SALT) tax issues, please reach out to Mary Jo Dolson, Partner, Tax & Business Services.

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State & Local Tax