IRS MEF option added as centralized filing ramps up

Written on Feb 08, 2018

OSCPA staff report

Businesses opting in to centrally file 2018 municipal net profit tax returns now may choose to use the IRS’ Modernized e-File portal (MeF), the Ohio Department of Taxation said Feb. 5, even as legal machinations continue in two city lawsuits seeking to obstruct the system.

Both lawsuits are requesting an injunction against the implementation of the centralized collection process until the court determines the constitutionality of the tax provisions. On Feb. 2 the State of Ohio filed a brief opposing the cities’ motion for a preliminary injunction. The cities have until Feb. 9 to file a reply, and a hearing is scheduled on the matter for Feb. 12.

Nevertheless, the opt-in process is well underway, with hundreds of Ohio businesses already choosing state administration for Tax Year 2018. The addition of the MeF filing option is good news for those looking to simplify the complicated process for Ohio municipal net profit filings.

“We are pleased the IRS has agreed to let Ohio taxpayers and tax practitioners file municipal net profit tax annual returns through MeF,” Tax Commissioner Joe Testa said. “It just adds to the efficiencies and advantages of filing municipal tax returns with the state, rather than with each municipality in which income is earned.”

Tax practitioners whose commercial software already integrates with MeF will welcome the new filing option. ODT also is negotiating with software vendors for the option to upload net profit tax returns directly through the Ohio Business Gateway. These agreements are expected to be in place before any 2018 net profit returns must be filed in 2019.

Businesses still need to opt in and pay 2018 quarterly estimated payments through the Gateway to file centrally in 2019. Register by the first day of the third month of a taxpayer’s fiscal year (March 1 for calendar year businesses). The first quarter payment is due April 15. Just follow these step-by-step instructions.

Taxpayers also can conveniently file the quarterly declarations and schedule payment dates for the entire year during one visit to the Ohio Business Gateway.

Also by March 1, businesses that intend to file centrally must notify each municipal corporation in which the taxpayer conducted business during the previous taxable year, on Form MNP-MN. The tax commissioner has prescribed two versions of the form: one for tax preparers and the other for taxpayers.

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