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For taxable year ending in
2022
Ohio IT 4708
Pass-Through Entity
Composite Income
Tax Return Instructions
Rev. 12/22
Department of
hio Taxation
tax. hio.gov
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IT 4708
Rev. 12/22
Table of Contents
A H
Amended Returns...................................7 Highlights for 2022..................................2
Appendix A (IPTE) ...............................15
Apportionment Formula ...................11-12 I
Apportionment Formula Worksheet ......14 Income & Adjustments .......................8-10
Investor Information ..............................13
B
Bonus Depreciation .....................9-10, 13 P
Payment Options .................................4-5
D Penalties and Interest .............................8
Deductions.......................................10-11
R
F Refundable Business Credits ..........12-13
Filing Tips ...............................................3
T
G Taxpayer Assistance ...............................1
General Instructions ............................6-7
Online Resources
The Department of Taxation's website at tax.ohio.gov has many resources available to assist when filing the Ohio Pass-Through
Entity & Fiduciary income tax returns:
FAQs – Review answers to common questions on topics.
Forms – Find all pass-through entity & fiduciary income tax forms (including related schedules and worksheets). Many forms
have fill-in versions that you can complete online, print, and then submit to the Department.
Information Releases – Research detailed explanations and legal analyses of certain tax topics.
Ohio Virtual Tax Academy – View webinars designed and presented by Department staff on Ohio's state taxes.
Tax Alerts – Sign up to receive tax updates and reminders from the Department via email.
Federal Privacy Act Notice
Because we require you to provide us with a Social Security number, the Federal Privacy Act
of 1974 requires us to inform you that providing us your Social Security number is mandatory.
Ohio Revised Code 5703.05, 5703.057 and 5747.08 authorize us to request this information.
We need your Social Security number in order to administer this tax.
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IT 4708
Rev. 12/22
Taxpayer Assistance
Need Help? – To help answer questions and ensure that tax returns are filed accurately, the Department of Taxation provides
the following resources at tax.ohio.gov:
Additionally, the website has all Pass-Through Entity and Fiduciary income tax forms to download or print. If you cannot find
the answer using the website, contact the Department using any of the following methods:
Email – Click 'Contact Us' at the top right on tax.ohio.gov and select
‘Email Us’ to access a secure email form, or email directly to Pass- For persons who use text telephones
(TTYs) or adaptive telephone equip-
ThroughEntity@tax.state.oh.us.
ment only: Contact the Ohio Relay Ser-
Call – Speak with an examiner at 1-888-405-4039 during the vice at 7-1-1 or 1-800-750-0750 and give
Department's normal business hours. the communication assistant the Ohio
Department of Taxation phone number
Normal business hours are from 8 a.m. to 5 p.m. Monday through that you wish to contact.
Friday excluding holidays.
Write – Contact the Department by mail at:
Ohio Department of Taxation
Pass-Through Entity
P.O. Box 181140
Columbus, OH 43218-1140
Note: To overnight documents to the Department, please use the
street address listed below.
4485 Northland Ridge Blvd.
Columbus, OH 43229-6596
Form Requests: Visit tax.ohio.gov to easily download the forms.
Request tax forms anytime by calling 1-800-282-1782.
Go Paperless and File Electronically!
The IT 4708 can be filed electronically through the federal e-file program overseen by the IRS (irs.gov/filing), or through
a participating third-party tax preparation product. PTEs can verify their software is compatible with the MeF program by
reviewing the list of approved software vendors at PTE and Fiduciary Income Tax - Software Developers.
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IT 4708
Rev. 12/22
Highlights for 2022
2022 Tax Rate Electronic Filing
If the PTE taxable reporting period begins on or after 1/1/2021, The IT 4708 can be filed electronically through the federal
the tax rate is 3.990%. If the reporting period begins on or after e-file program overseen by the IRS (irs.gov/filing), or through a
1/1/2019, the tax rate is 4.797%. participating third-party tax preparation product. For a current list of
approved software programs, please see the Software Developers
New Vocational Job Credit page on the Ohio Department of Taxation website, and search for
This credit is granted by the Ohio Department of Education (ODE). the most recent MeF Approval Status link.
To claim the credit, attach a copy of the certificate from ODE that
indicates the amount of the credit and the tax year for which the A tax return preparer that prepares more than 11 original tax returns
credit is awarded. For more information about the requirements for during any calendar year shall use electronic filing technology. This
the credit, visit education.ohio.gov. provision does not apply to a tax return preparer in any calendar
year if, during the previous calendar year, the tax return preparer
See R.C. 5747.057.
prepared not more than 10 original tax returns.
IT K-1
Each entity with Ohio income should prepare a separate IT K-1 for See RC 5747.082.
each investor, owner or qualifying beneficiary to enclose with the
investor’s, owner’s or beneficiary’s return. Should the PTE File the IT 4708?
A PTE must file an Ohio return to report and pay tax on behalf of its
For more information, see the IT K-1 form and instructions on tax. nonresident individual, trust, and PTE investors. The PTE can elect
ohio.gov in the searchable Tax Forms section. to file the IT 4708, the IT 4738 or the IT 1140. A PTE that changes
forms from year to year must ensure all periods of income are
Schedule E Update (Nonrefundable Business Credits) reported and all related tax is timely and fully paid.
Schedule E has been updated to include the new Vocational
Job Credit (granted by ODE). Note for applicable credits: Ohio NOTE: Once the IT 4708 is filed for any given tax period, the PTE is
Development Services Agency is not known as Ohio Department not permitted to amend this return to change to an IT 1140 or IT 4738.
of Development.
For more information regarding which form to file, see the following
Credit Carryforward chart, or search the PTE FAQ’s at tax.ohio.gov:
Beginning with tax years that start on or after January 1, 2020 the
credit carryforward of overpayments has been reinstated, however, The IT 4738 The IT 4708 The IT 1140
for tax years 2017-2019 the Department did not permit credit Income Tax Composite Withholding
carryforwards. A credit carryforward is only allowed on a timely- Return Return Return
filed, original return; otherwise, any overpayment will be refunded.
Opportunity Zone Investment Credit Transfer Form April 15th after the April 15th after the 15th day of
A person that holds a wholly or partially unclaimed Ohio Opportunity Filing date year in which the year in which the fourth month
entity’s taxable entity’s taxable after close of
Zone Investment credit certificate may transfer the right to claim all year ends year ends fiscal year
or part of the remaining credit to any other person. The Opportunity
Zone Investment Credit Transfer Form is available at tax.ohio.gov. Can the Yes Yes No
For more information about the credit, visit development.ohio.gov return include *All investors
or call ODOD at 1-800-848-1300. (owners) must be
resident included
See R.C. 122.84(E) investors?
5% (all) 3.990% (all) 5%
Tax rate *For reporting periods *For reporting periods (individuals) or
that begin on or after that begin on or after
1/1/2022 1/1/2021. 8.5% (entities)
“3% (all)
*For reporting
periods that begin
on or after 1/1/2023
Can the No Yes No
return claim
credits?
Can the return
claim payments No Yes No
from other
PTEs?
Investor May file Ohio May file Ohio Must file Ohio
filings return return return
NOTE: Credits cannot be claimed on the IT 4738 or IT 1140.
However, a PTE can claim credit for such amounts on the IT 4708.
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IT 4708
Rev. 12/22
Filing Tips
Provide a Current Address
The Department uses the most up-to-date address on file to send correspondence, billings, assessments, and refunds. If the
address is not correct, refunds and notices will be mailed to the incorrect address. To update an address, check the box above the
address line on the return or visit the Business Address Update page at tax.ohio.gov to change the address.
Verify the IT 4708 and UPCs are for the Correct Tax Year
The Department releases new forms and UPCs each tax year. Do NOT cross out the year at the top of the IT 4708 or UPC and
write in a new one, as doing so will delay the processing of the IT 4708 or UPC. A PTE with tax year ending during calendar year
2022 must file the 2022 IT 4708.
Maintain a Bank Account
The Department cannot change the name on a refund check, or issue the check directly to an investor, due to the closing or
termination of a business.
Reprint Corrected Software-Generated Paper Returns
If the printed software-generated return from a tax preparation program subsequently requires changes on the return, do not write
in the changes. Instead, use the software to make the necessary changes, save, and reprint the return. The Department’s system
will not pick up handwritten changes on returns generated by tax preparation software.
Complete All Applicable Schedules on the Return
When filing via a software program, complete all relevant schedules and do not override any line items. Information from schedules
on the IT 4708 flows to other lines that are used to calculate the tax liability. If the schedules are not completed, a value of zero
will flow to the corresponding lines, which will override any amounts that may have been entered. The return will be recalculated
accordingly, resulting in a potential billing notice or reduced refund.
Report Apportionment Ratio and Ownership Percentage
Enter percentages and ratios in decimal format (e.g., report 30.09% as .3009). Report 100% as 1.0000. Enter apportionment ratios
in decimal format and carry to six decimal places. In addition, do not enter text (e.g., “null” or “zero”) in numeric fields.
Enter Estimated Payments and Credits on Correct Lines
Incorrect reporting of the payments and credits may result in a denied/reduced refund or bill. If the entity receives an IT K-1
reporting a PTE payment or credit from another entity on its behalf, do not report these as estimated payments.
Report refundable business credits on Line 19 of Schedule I and on Schedule V – Refundable Business Credits ONLY. Do not
claim nonrefundable credits on this schedule. Instead, claim nonrefundable credits on Schedule E and Line 11.
Report nonrefundable business credits on Line 11 of Schedule I – Taxable Income, Tax, Payments and Net Amount Due
Calculations ONLY. You must include a copy of Schedule E – Schedule of Nonrefundable Business Credits, and include copies
of the required certificates. Do not use Schedule E to claim refundable credits. Instead, claim refundable credits on Line 19 of
Schedule 1.
Provide Supporting Documents
Attach the appropriate documentation specified on the IT 4708 to validate the amounts reported, such as IT K-1s to verify income/
withholding flowing from another PTE to the filer, and from the filer to an investor, copies of required certificates issued for
nonrefundable credits, and any other documents providing clarification.
Report the Proportionate Share of Income and Credits
A PTE is only permitted to claim the portion of credits belonging to the investors whose income is reported on the IT 4708 return.
Example: Four individuals each own 25% of Entity B. Two of the individuals are Ohio residents (i.e., non-qualifying investors) and
two are nonresidents of Ohio (i.e., qualifying investors). Entity B owns 100% of Entity A. Entity A pays $1,000 in Ohio pass-through
entity tax.
Entity B files an IT 4708, but only includes the nonresident investors and their share of the PTE’s income on the return (50% of the
total). While Entity B can claim taxes paid by Entity A as a credit on its IT 4708, it is limited to claiming only the portion of the credit
belonging to the investors included on the return of $500 (50% of $1,000). The resident investors should claim their share of the
credit ($250 each) when they file their Ohio IT 1040 returns.
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IT 4708
Rev. 12/22
Payment Options
First-Time Filers: Submit PTE Registration Form Before First Estimated Payment
If the PTE is a first-time filer, submit the Pass-Through Entity and Fiduciary Income Tax Registration Form before submitting the first
estimated payment. The form can be found on the tax.ohio.gov website in the Tax Forms search. Failure to submit the registration
form may result in a delay in processing the estimated payment(s), resulting in a billing notice or refund delay.
Submit a Separate Check for Each Balance
A separate check is required for each tax return payment, estimated payment, billing/assessment payment, etc. The Department cannot
apply a single check to multiple balances. The check or money order should be made payable to “Ohio Treasurer of State” with identify-
ing information on the memo line, including:
● Federal employer identification number (FEIN),
● Tax form using the payment (IT 4708);
● Tax year end for the payment (mm-dd-yy).
Using Payment Coupons Created by Third-Party Software
Before submitting a payment coupon created by third party software, please verify the reporting period end date matches the software-
generated Key ID numbers and the number string at the bottom of the payment coupon, in the format MMYY. If mismatched, the pay-
ment will be misdirected, causing a delay in processing the estimated payment(s), resulting in a billing notice or refund delay.
Please contact the third-party software company’s support line to resolve.
Methods for Making PTE and Fiduciary Income Tax Payments
1. Electronic Funds Transfer (EFT): Payments may be remitted by EFT (ACH credit) via the Ohio Treasurer of State (TOS).
Any questions about the EFT payment process should be directed to the Ohio Treasurer of State by calling (877)338-6446.
This is an ACH credit option; the entity initiates the payment through its own bank. No online credit card payment or
ACH debit option exists at this time either through the Ohio Treasurer of State (TOS) or the Ohio Department
of Taxation.
Access the applicable tax form-specific link below for the information page with the TOS routing/account numbers and codes/
format the financial institution must use to issue the ACH credit via the TOS payment option:
IT 4708 Pass-Through Entity Composite Income Tax Payments
IT 1140 Pass-Through Entity and Trust Withholding Tax Payments
IT 1041 Fiduciary Income Tax (Trusts and Estates) Payments
IT 4738 Electing Pass-Through Entity Income Tax Payments instructions unavailable, as of publishing. Use IT 1140
payment instructions.
NOTE: The TOS no longer requires PTE and fiduciary filers to submit an EFT authorization form to register before making an
IT 4708, IT 4738, IT 1140 and/or IT 1041 payment via ACH credit (no ACH debit option).
2. Check or Money Order: Make check or money order payable to “Ohio Treasurer of State.” A payment made by a check or
money order must be submitted with the appropriate Ohio Universal Payment Coupon (UPC) based on the form filed. All UPCs
can be found on the tax.ohio.gov website in the searchable Tax Forms section by entering “UPC” in the Form Title or Number
field. Please mail the payment and UPC to the address on the UPC or hand deliver to our self-service walk-in center.
3. Electronic Check: When filing electronically through an approved software program, the PTE or fiduciary has the option to
make a payment by electronic check in the form of an Electronic Funds Withdrawal, or direct debit. The direct debit option is
only available for e-filed returns. For mailed returns created from an approved software program, the options for payment are
1) Electronic Funds Transfer (EFT), or 2) check or money order, as listed above.
For a current list of approved software programs, please see the Software Developers page on the Ohio Department of Taxa-
tion website, and search for the most recent “MeF Approval Status” link.
Please contact the software companies directly for their electronic payments support.
Completing the Universal Payment Coupon (UPC)
Each payment made by check or money order must be submitted with the appropriate Ohio Universal Payment Coupon (UPC). Appli-
cation of payments is driven by the UPC used and is based on which form is filed (i.e., IT 1041, IT 4708, IT 4738 or IT 1140). Each UPC
allows the Taxpayer to make either an estimated payment (“ES” payment) or payment submitted with the tax return (“P” payment). Only
one type of payment can be made on each UPC submitted.
All UPCs can be found in the Tax Forms field by entering “UPC” in the Form Title or Number field.
The IT 4708 UPC is used by PTE to make either an estimated payment (IT 4708ES) or a payment submitted with the return (IT 4708P).
When completing the UPC:
● Enter the reporting period start date and end date in the format mm-dd-yy;
● Select either the IT 4708ES or IT 4708P;
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IT 4708
Rev. 12/22
● Enter the correct entity type code in the box above the payment amount (*see codes on instructions page above UPC);
● Enter the amount of payment as a whole number without a decimal, as the UPC features a preprinted “.00.”
Sample IT 4708 UPC: This form must be included with each check or money order.
Include a Check or Money Order with each IT 4708 UPC
Payable to “Ohio Treasurer of State” with identifying information on the memo line, including:
● Federal employer identification number ( FEIN),
● Tax form using the payment (IT 4708);
● Tax year end for the payment (mm-dd-yy).
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IT 4708
Rev. 12/22
Can a PTE Claim a Net Operating Loss (NOL) on the IT 4708?
2022 Ohio IT 4708 PTEs are not permitted to claim an NOL deduction on the IT 4708.
General Instructions Instead, investors who want to utilize an NOL deduction must file
Note: Ensure tax return pages are in numerical order. Include any the IT 1040.
attachments after the return. The return and supporting schedules How Does a PTE Determine Its Ohio Taxable Year?
are on the Tax Forms page tax.ohio.gov. A PTE’s taxable year for Ohio income tax purposes is the same as
What is a Pass-Through Entity (PTE)? its taxable year for federal income tax purposes.
A “pass-through entity” is an S corporation, partnership, or limited However, when filing the IT 4708 return the PTE must file a single
liability company (LLC). A PTE is also any other person, except an return that includes all tax periods and aggregates all income and
individual, trust, or estate, that is not classified as a C corporation expenses for the investor(s). Multiple IT 4708 returns (including
for federal tax purposes. See R.C. 5747.01(K) and 5733.04(O). short-period returns) cannot be filed in the same year.
Who Should File Form IT 4708? When is the Return Due?
The IT 4708 is a composite income tax return a PTE elects to file on A PTE with a taxable year end during calendar year 2022 must file
behalf of its qualifying investors. It is filed in lieu of the IT 1140 Pass- its 2022 IT 4708, including copies of its IT K-1s, by April 18, 2023.
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. Filing Extensions
Unlike the IT 1140 and the IT 4738, a PTE can use the IT 4708 to The extension due date for filing the IT 4708 is September 15,
claim credits or payments made on its behalf by other PTEs. The 2023, provided the PTE qualifies for an IRS extension of time to
election to file the IT 4708 applies only for one tax year and, once file. Ohio does not have an extension request form but honors
made, is binding and irrevocable. the IRS extension. Include a copy of the IRS extension or IRS
acknowledgement, and/or the extension confirmation number if
Note: A trust cannot file the IT 4708. See R.C. 5747.08(D). electronically filed. However, if the PTE has a fiscal year end, it
Which Investors Can Be Included on Form IT 4708? may have a different extension due date. See table below.
The PTE can elect to include any qualifying investor, other than An extension of time to file does not extend the time for payment
a C Corporation or other exempt entity, on form IT 4708. This of the tax due. The PTE must make extension payments by April
includes individuals (both residents and nonresidents), estates, 18, 2023 with the required IT 4708 UPC by searching for UPC in
trusts, and other PTEs. The PTE can include an investor on the IT the Form Title or Number field on the Tax Forms page at tax.ohio.
4708, regardless of how another PTE files on the investor’s behalf. gov. Interest will accrue on any tax not paid by April 18, 2023, and
If an investor’s only Ohio-sourced income is included on the IT penalties may also apply.
4708, the investor is not required to file an Ohio individual income
tax return for the tax year. However, the investor may choose to TY 2022 Due Dates and Extended Due Dates
file an income tax return (e.g. form IT 1040 or IT 1041) and claim a Fiscal Year IRS Due Ohio Due IRS Ext. Ohio Ext.
refundable credit for taxes paid by the PTE on the IT 4708. Ends Date Date Date Date
See R.C. 5747.08(D)(1)(a) and (3); 5747.08(I). 1/31/22 4/18/22 4/18/23 10/17/22 4/18/23
How Does Ohio Law Define Business and Nonbusiness 2/28/22 5/16/22 4/18/23 11/15/22 4/18/23
Income?
“Business income” is income, including gain/loss arising from any 3/31/22 6/15/22 4/18/23 12/15/22 4/18/23
of the following:
● Transactions, activities, and sources in the regular course of 4/30/22 7/15/22 4/18/23 1/17/23 4/18/23
a trade of business operation;
● Real, tangible, and intangible property if the acquisition, rental, 5/31/22 8/15/22 4/18/23 2/15/23 4/18/23
management, and disposition of the property constitute integral
parts of the regular course of a trade or business operation; 6/30/22 9/15/22 4/18/23 3/15/23 4/18/23
● A partial or complete liquidation of a business, including gain
or loss from the sale or other disposition of goodwill; 7/31/22 10/17/22 4/18/23 4/18/23 4/18/23
● A sale of an equity or ownership interest in a business if the
sale is treated for federal income tax purposes as the sale of 8/31/22 11/15/22 4/18/23 5/15/23 5/15/23
assets and/or the seller materially participated, as described 9/30/22 12/15/22 4/18/23 6/15/23 6/15/23
in 26 C.F.R. 1.468-5T, in the activities of the business during
the taxable year in which the sale occurs or during any of the 10/31/22 1/17/23 4/18/23 7/17/23 7/17/23
five preceding taxable years.
● Compensation and guaranteed payments paid by a pass- 11/30/22 2/15/23 4/18/23 8/15/23 8/15/23
through entity, or a professional employer organization on its
behalf, to an investor who directly or indirectly owns 20% or 12/31/22 3/15/23 4/18/23 9/15/23 9/15/23
more of the entity.
Nonbusiness income is any income other than business income. See R.C. 5747.08(G) and Ohio Admin Code 5703-7-05. The fiscal
year ends referred to in the above table may or may not reflect a
How Does an Entity Determine What Income is Business Income? 12-month filing period.
Business income can be determined by using either of two tests:
● Transactional Test: Looks to the nature, frequency and Estimated Tax Payments
regularity of the transaction; The PTE must make estimated tax payments with the IT 4708ES
● Functional Test: Looks to whether the property was integral Universal Payment Coupon (UPC) for the entity’s taxable year if the
to the trade or business, or if it generated business income PTE’s estimated tax liability after credits is greater than $500. The
in the past. interest penalty applies to estimated payments not timely made.
Generally, all income from a PTE is presumed to be business For more information, see page 8.
income.
See R.C. 5747.01(B).
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IT 4708
Rev. 12/22
Due Dates for Estimated Tax Payments When Not to Amend Your Return
If any filing due date set forth below falls on a weekend or on a Some common mistakes may not require an amended return. Some
holiday, then the due date becomes the first business day thereafter. examples include:
Due Date for Estimated Payments % Cumulative Estimated Payments ● Math errors;
Made ● Missing pages or schedules;
On or before the 15th day of the 4th 22.5% of the current year tax liability ● Demographic errors;
month of the taxable year. ● Missing income statements (W-2, 1099, K-1) or credit
certificates.
On or before the 15th day of the 6th 45% of the current year tax liability In these situations, the department will either make the corrections to
month of the taxable year.
the return or contact the PTE to request the needed documentation.
On or before the 15th day of the 9th
month of the taxable year. 67.5% of the current year tax liability Requesting a Refund
The PTE may want to amend the return to request an additional
On or before the 15th day after the 90% of the current year tax liability credit, deduction or payment. Such changes may result in a refund.
close of the taxable year. The PTE has four years from the date of the payment to request
For more information, see the Payment Tips on page 3. a refund. The PTE must include supporting documentation to
Does Ohio Follow the Alternative Preparer Signature substantiate the changes reported on the amended return. Some
Procedures? common required documentation includes:
The Department follows federal Notice 2004-54. However, the paid ● The federal return, including applicable schedules and
preparer must print (not sign) his/her name if the PTE authorizes attachments;
the preparer to discuss the return with the Department. Preparers ● Copies of the income statements (W-2, 1099, etc.);
with a Preparer Tax Identification Number (PTIN) must provide it ● IT K-1s or credit certificates from ODOD.
on all returns. Reporting Additional Tax Due
See R.C. 5703.262(B) and 5747.08(F). The PTE should amend the return to report additional income or
reduce a previously claimed credit or deduction. Such changes may
Can the PTE’s Tax Preparer Contact the Department About result in additional tax due. Payment should be included with the
the IT 4708? amended return using an IT 4708 UPC payment coupon.
The PTE can check the box above the tax preparer’s name on page
2 of the return to authorize the preparer to: Changes to the Federal Return
● Contact the Department about the status of the PTE return, If the IRS makes changes to the federal return, either based on
payments, or refund; an audit or an amended return, and those changes affect the Ohio
● Provide the Department with information missing from the return, the PTE is required to file an amended IT 4708. DO NOT file
PTE’s return; AND your amended Ohio return until the IRS has finalized the changes to
● Respond to inquiries or notices from the Department related the federal return. Once the changes are finalized, please include
to the return. a copy of all the following:
● The federal amended 1065 OR 1120S; AND
See R.C. 5747.08(J). ● The IRS acceptance letter.
How Does a PTE Determine its Ohio Method of Accounting? Note: Instead of including a copy of these documents, the PTE
A PTE’s method of accounting on its Ohio return is the same method may submit a copy of the IRS Tax Account Transcript reflecting the
it used for federal income tax purposes. updated federal return information.
See R.C. 5747.45(B).
The amended IT 4708 should be filed no later than 90 days after
When Should the PTE Complete the IT K-1? the IRS completes its review of the federal return. Failure to file
The IT K-1 allows the PTE to report its income, adjustments, credits, the return within this time period may result in an assessment or a
and apportionment information to its investors. The information is denial of the refund claim.
used by the PTE’s investors when completing the IT 1040, IT 1041, The 90 days begins to run when:
IT 4708, IT 4738 or IT 1140. ● The period for the federal appeal has expired, or
● The date a federal settlement agreement is signed.
The PTE must complete two copies of the IT K-1 for each investor
whose income is included on the IT 4708. One copy of the IT K-1 See R.C. 5747.10.
must be included when filing the IT 4708. The other copy should
be provided to the investor. File Prior to Out of Statute
Ohio’s pass-through entity and fiduciary income taxes generally
The IT K-1 is available in the searchable Tax Forms section at tax. have a four-year statute of limitations. The Department has four
ohio.gov. For additional information, please see the IT K-1 category years to issue an assessment from the later of when the return was
in the PTE FAQs at tax.ohio.gov. due or filed. The PTE or fiduciary has four years from the date of the
payment to request a refund. Please see the table below for details.
Amended Returns Tax Year Due Date Timely Payment or Withholding Out-of-Statute Date
When to Amend 2018 4/15/19 4/18/23
The PTE can file an amended IT 4708 to report changes to the 2019 7/15/20 7/15/24
originally filed return(s). An amended return can result in either a tax
due or a refund based on the changes. Under certain circumstances, 2020 5/17/21 5/15/25
an amended return may be required. To amend the IT 4708 the 2021 4/18/22 4/15/26
PTE should file a new return showing the original amounts for any
item that remains unchanged and reflecting all proposed changes; 2022 4/18/23 4/15/27
indicate that it is amended by checking the box at the top of page 1.
Please include a copy of the following with the amended return:
● Any canceled checks used as payment on the originally filed
return; AND
● Supporting documentation that reflects the reason(s) for filing
the amended return.
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IT 4708
Rev. 12/22
Line 14 - Ohio IT 4708 UPC Payments
Schedule I – Taxable Income, Tax, Payments
and Net Amount Due Calculations Enter estimated payments made with an IT 4708 UPC or EFT
payments made through the Ohio Treasurer of State for this tax
Generally, all income from an PTE is presumed to be business
income. year applied to this return.
Note: Amounts reflected in Schedule I are the combined amounts Line 15 - Ohio IT 1140 and/or IT 4738 Estimated (UPC/Electronic)
of income and adjustments ONLY for those investors who are Payments Claimed on This Return
participating in the filing of this return.
Enter the portion of estimated payments made with an IT 1140 and/
Line 1 – Total Income (loss) from Schedule II, line 36 or and IT 4738 UPC for this tax year to be applied to this IT 4708.
This line must equal line 36 (the sum of lines 27 through 35); a This will result in a delay in processing the return. These amounts
difference will delay processing of the return and may result in a cannot also be claimed on an IT 1140 and/or IT 4738.
billing or reduced refund. Line 16 - Ohio IT 4708 Estimated (UPC) Payments Claimed on
Line 2 – Total Deductions from Schedule III, line 41 IT 1140
This line must equal line 41 (the sum of lines 37 through 40); a ● Report the portion of any IT 4708 estimated payments made
difference will delay processing of the return and may result in a for the tax year on a IT 4708 UPC (reported on line 14) that
billing or reduced refund. the taxpayer wants the Department to apply to an IT 1140
being filed for the same tax year; OR
Line 4 – Net Allocable Nonbusiness Income (Loss)
● If an amended IT 4708 is being filed and the original 4708
Generally, income earned by a PTE is apportionable business income. reported an overpayment, enter the portion of the 4708
If income is shown on this line, the PTE must provide a narrative and estimated payments transferred to the 1140 as originally
schedule explaining the types of income included on this line and why reported on line 16 of the return PLUS any refund received
they are nonbusiness income. on the originally filed return.
The types of income which MAY be excluded are all types and Line 19 – Total Refundable Business Credits
classifications of income from an investment pass-through entity
(IPTE) attributable to the distributive shares of income from other This line must equal line 52 from Schedule V; a difference will de-
PTEs and certain other net income items as listed in R.C. 5733.401(C) lay processing of the return and may result in a billing or reduced
(1). refund.
Failure to include the explanation will delay processing of the return NOTE: The PTE can only claim the distributive share of direct
and may result in a billing or reduced refund.
and indirect refundable business credits attributable to those in-
Line 8 – Net Nonbusiness Income (Loss) Allocated to Ohio vestors whose income is included on this return. Provide IT K-1s
to verify credits claimed.
If income is shown on this line, the PTE must provide a narrative
and schedule explaining the types of income included on this line Line 22 – Amount of Line 21 to be Credited Toward Next Year’s
and why they are nonbusiness income. Tax Liability
An investment pass-through entity (IPTE) can include Ohio income Beginning with filing periods that start on or after January 1, 2020 the
from other PTEs as listed on the IT K-1, line 2a, Ohio portion; include credit carryforward of overpayments has been reinstated, however
the IT K-1s for verification. Failure to include this information will for tax years 2017-2019 the Department did not permit credit
delay processing of the return and may result in a billing or reduced carryforwards. A credit carryforward is only allowed on a timely-
refund. filed, original return; otherwise, any overpayment will be refunded.
See R.C. 5747.20,5747.21 5747.212, 5747.221, and 5747.231; Line 23 – Amount of Line 21 to be Refunded
5733.401.
Interest on Overpayments. Once the return has been verified, if
Line 10 - Tax Liability Before Credits the refund exceeds one dollar it will be refunded to the PTE. The
PTE will receive interest on the refund from the date of payment until
For reporting period beginning on or after January 1, 2021, the tax the date of the refund if the amount is not refunded within 90 days
rate is 3.990%. For reporting period January 1, 2019 to December of the later of the return’s due date, or the date the return was filed.
31, 2020, the tax rate is 4.797%. For reporting period prior to January
1, 2019, the tax rate is 4.997%. During calendar year 2023, interest accrues on overpayments at
an annual rate of 5%.
Line 11 – Nonrefundable Business Credits
See R.C. 5747.11(B) and (C)(1).
A PTE claiming nonrefundable business credits must include
Schedule E when filing its return. The PTE can only claim the Line 25 – Interest Due on Late Payment of Tax
distributive share of direct and indirect nonrefundable business credits
attributable to those investors whose income is included on this return. Interest is due on any unpaid tax exceeding one dollar from the
unextended due date until the date the tax is paid. An extension of
Line 13 – Interest Penalty on Underpayment of Estimated Tax time to file does not extend the payment due date. The interest rate
for calendar year 2023 is 5%.
A PTE that does not make timely, sufficient estimated payments
may be subject to the 2210 interest penalty. A PTE filing the IT 4708 See R.C. 5747.08(G).
should use pages 1 and 2 of the Ohio IT/SD 2210 to determine if an
interest penalty is due, and if so the interest penalty amount. This Line 26 – Total Amount Due
form is available in the Tax Forms section of tax.ohio.gov. Make payments by:
● Electronic check through an approved software program when
Note: A PTE may be subject to the interest penalty even if it is due filing electronically,
a refund when filing its return. ● Electronic funds transfer (EFT) as ACH credit (pushed by bank)
See R.C. 5747.09(D) and (E). via the Ohio Treasurer of State; OR
● Sending a personal check / money order with the Ohio UPC.
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For questions regarding the EFT payment program, see the compensation do not apply. Compensation paid to a 20% or more
Electronic Funds Transfer Via Ohio Treasurer of State (TOS) at investor must be included on this line.
Business Tax - Pay Online at tax.ohio.gov.
Example 1: Jim is a Kentucky resident who owns 30% of PTE A.
Schedule II – Income and Adjustments He provides services for PTE A in Kentucky and is paid a wage for
his services. Since Jim owns at least 20% of PTE A, his wages
Note: Amounts reflected on Schedule II are the combined amounts are reclassified as a distributive share of income. Thus, the wages
of income and adjustments ONLY for those investors who are are required to be included on PTE A’s return as a related member
participating in the filing of this return. The amounts included are add-back, even though Jim is a Kentucky resident.
those which, pursuant to the Constitution of the United States, the
Constitution of Ohio, or any other Ohio or federal law, are subject Example 2: Karen is an Iowa resident who owns 19% of PTE A.
to a tax measured by net income. Karen receives wages from PTE A. However, since Karen does
not own at least 20% of PTE A, her wages are not reclassified as
Generally, all income from a PTE is presumed to be business a distributive share of income or added back onto the return as a
income. See R.C. 5747.01(B). related member add-back.
Line 28 – Related Member Adjustments See R.C. 5733.40(A)(7).
All pass-through entities are required to add back expenses or Line 32 - Portfolio Income(loss) a. - f.
losses paid or incurred with respect to transactions involving List the amount of each type of portfolio income (or loss) on each
related members. A “related member” is: line.
● Any person described in IRC §1563(e) that owns at least 40%
of the PTE; NOTE: If the sum of lines 32d and 32e (capital gains/losses) is
● Any individual investor, or the investor’s spouse, child, grand- an overall loss, the amount on line 32e is limited to $3,000 per
child, or parent if combined they own at least 50% of the PTE; participating investor.
● An investor that is a partnership, estate, trust, or corporation,
or the investor’s partnership, estate, trust, or corporation if Line 34/Line 53 (Schedule VI): IRC §168K Bonus Depreciation
and §179 Expense Add-back
combined they own at least 50% of the PTE; OR
● A corporation, or a party related to the corporation that would Check the box for the appropriate add-back ratio.
require an attribution of stock from the corporation to the party Add 5/6 of IRC §168(k) bonus depreciation allowed under the
or from the party to the corporation if the PTE owns at least IRC. Also, add 5/6 of any qualifying §179 depreciation expense.
50% of the corporation. However:
Ownership includes: direct, indirect, constructive, and beneficial. ● Replace “5/6” with “2/3” for employers who increase their Ohio
income taxes withholding by an amount equal to or greater than
● Direct – Investor owns a PTE with no other owners in be- 10 percent over the previous year; OR
tween. ● Replace “5/6” with “6/6” for taxpayers who incur a net operating
● Indirect – Investor owns a PTE that owns another PTE. loss (NOL) for federal income tax purposes if the loss was a
● Constructive – Person is not an investor but is deemed to direct/indirect result of the §168(k) and/or §179 depreciation
own the PTE through attribution because of their relationship expenses.
to one of the PTE’s investors. If the amount of qualifying §179 depreciation expense is greater
● Beneficial – Person is a beneficiary of a trust or estate, and than $200,000, the $25,000 deduction is reduced dollar for dollar
thus is treated as an “owner” of the asset. . by any amount over $200,000, per the IRC as it existed as of
December 31, 2002.
Note: The attribution rules in IRC §318 apply for purposes of
evaluating the ownership requirements. See the PTE FAQs at tax. Using the following lines from federal form 4562, the add-back
ohio.gov for additional examples. formula is (line 12 - $25,000) + line 14 + line 25. The sum of these
lines is multiplied by the appropriate ratio.
Common expenses and losses subject to add back when paid to a
related member include: Additionally, there is no requirement to make Ohio’s depreciation
add-back in either of the following circumstances:
● Management fees;
● The depreciation is from a PTE, and the investor owns less
● Interest expenses; than 5% of the PTE. This is true even if the PTE performed
● Rents and royalties; the add-back on its Ohio filing (i.e., the IT 1140, IT 4708 or IT
● Compensation paid to an individual investor’s family mem- 4738); OR
bers or other entities; ● A PTE that increases its Ohio income taxes withheld over the
● Expense sharing, or “common paymaster” arrangements. previous year’s by an amount greater than or equal to the
sum of §168(k) and/or §179 depreciation amounts.
For more information, see FAQs at tax.ohio.gov and the Informa-
tion Release Meaning of “Indirect” Ownership. Example 1: PTE A has total of $180,000 subject to add-back for
the current tax year. The $100,000 of §179 depreciation is from
See R.C. 5733.40(A)(3) and (4) and R.C. 5733.40(P), IRC PTE A’s business operations. The $80,000 of §168(k) depreciation
§1563(e), and IRC §318. is from its distributive share of bonus expense from PTE B.
Line 29 and 30 – Guaranteed Payments and Compensation Source of Add-back Amount §168(k) Add-back Add-back
Depreciation (§179-$25,000) Ratio Amount
Enter compensation or guaranteed payments the PTE paid, or a
professional employer organization (PEO) paid on behalf of the PTE A - $100,000 $0 5/6 $83,333
PTE, to an investor who directly or indirectly owns at least 20% of the operations
PTE B-
profits or capital of the PTE at any point during the tax year. These distributive share/ $80,000 5/6 $66,667
amounts are reclassified from guaranteed payments/ compensation bonus expense
to a distributive share of income. Total add-back $100,000 $80,000 $150,000
for tax year:
Note: Agreements that Ohio has with Kentucky, West Virginia,
Pennsylvania, Michigan, and Indiana relating to the taxation of
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Example 2: PTE A owns 100% of PTE B. PTE A has $180,000 Federal Conformity
subject to add-back for the current tax year. PTE B increased its This line is also for federal conformity adjustments. For updates
Ohio employer withholding for its employees by at least 10% over on Ohio Conformity, see Ohio Conformity Updates at tax.ohio.gov
the previous tax year. PTE A must use a different add-back ratio and R.C. 5701.11.
for each source of depreciation, and calculates its depreciation For more information, see FAQs at tax.ohio.gov.
add-back as follows:
Add-Back - Combined add-back Line 36 – Total Income(loss)
Source of Add-back Amount
Depreciation (§179-$25,000) §168(k) Add-back Add-back This line must equal the sum of line 27 through line 35. A differ-
Ratio Amount
PTE A - $100,000 $0 5/6 $83,333 ence will delay processing of the return and may result in a billing
operations or reduced refund.
PTE B-
distributive share/ $0 $80,000 2/3 $53,333 Schedule III – Deductions
bonus expense
Total add-back $100,000 $80,000 $136,666 Lines 37-40 are allowable deductions for those investors that
for tax year:
participate in the filing of the IT 4708. Do not include deductions
Example 3: PTE A still has $180,000 subject to add-back for the that have already been used to reduce income items included on
current tax year, but its federal taxable income is ($100,000) (i.e. Schedule II.
PTE A has a federal NOL). PTE A would calculate its depreciation DO NOT include deductions solely because they are
add-back as follows: available to an individual on the federal 1040 or the
Add-Back - NOL ! Ohio IT 1040.
Source of Add-back Amount §168(k) Add-back Add-back CAUTION
Depreciation (§179-$25,000) Ratio Amount
PTE A - $100,000 $0 6/6 $100,000 Line 38 – Ohio Depreciation Deduction
operations Ohio Depreciation Deductions
PTE B-
distributive share/ $0 $80,000 6/6 $80,000 Use the table on line 54 to calculate the current deductions from
bonus expense the prior year add-back amounts. Deduct:
Total add-back
for tax year: $100,000 $80,000 $180,000 ● 1/5 of prior year 5/6 add-backs;
● 1/2 of prior year 2/3 add-backs; AND/OR
Put the total year add-back amount on line 53 of Schedule VI. ● 1/6 of prior year 6/6 add-backs;
For additional information, please see the FAQs and R.C. of applicable IRC §168(k) bonus depreciation and §179 expense
5733.40(A)(5) and 5747.01(A)(17)(a)(i-v). add-backs on a prior year filed IT 4708, IT 1140 or IT 4738.
Line 35 – Other Income or Deduction and Federal Conformity NOTE: Deduct only amounts that were added back by the PTE on
Additions a prior year’s IT 1140 or IT 4708. This deduction is available even
if the asset is no longer owned by the PTE.
Enter income or deductions not otherwise reported on Schedule The deduction must be taken in equal increments in consecutive
II that are part of an investor’s distributive share from the PTE. tax years. If the deduction is missed in a taxable year, any unused
Include a supporting schedule detailing each amount reported portion from any given tax year is not eligible to be carried forward.
on this line, as well as an explanation of why each amount is Instead, the PTE would have to amend the prior returns to claim
included on this line. Failure to provide this information may delay the deduction.
the processing of the return.
If there is an NOL, the deduction cannot be claimed for that year
The following generally can be included on this line: and will be carried forward to the next year without an NOL.
● Section 59(e)(2) – depletion amortized on federal Schedule
E; include federal form 4562. For additional information, see the PTE FAQs in the Bonus
● Deductions allocable to royalties appearing on federal Depreciation category at tax.ohio.gov.
Schedule E. See R.C. 5733.40(A)(5) and 5747.01(A)(18).
● §754 election – § 754 election is made to adjust the basis
of partnership property in the event of a sale or exchange of Line 39 – Net Federal Interest and Dividends Exempt from State
partnership interest, a partner’s death, or certain distributions Taxation & Federal Conformity Adjustments
to partners.
● §743(b) – 743(b) provides certain adjustments in the case of Enter interest and dividend income from obligations issued by the
a sale or exchange of a partnership interest in which a §754
United States government or its possessions/territories that are exempt
election is in place.
from Ohio tax under federal law.
The following generally cannot be included on this line: A comprehensive list of deductible interest and dividends can be found
● Charitable contributions. in Information Release IT 1992-01 – Exempt Federal Interest Income.
● Any state or federal credit amount, including the research
and development tax credit and the work opportunity credit. Examples of interest income that are not deductible:
● Wage expenses not deducted on the federal return related to ● Interest paid by the IRS on a federal income tax refund.
work opportunity credit from Ohio Schedule of Adjustments. ● Interest income from Fannie Maes or Ginnie Maes.
● Itemized deductions from federal Schedule A such as:
● Interest paid on loan proceeds to purchase investments See R.C. 5747.01(A)(3).
that is only deductible for individuals who itemize on
federal Schedule A.
● Any expense incurred to generate investment income Federal Conformity Deductions
that is only deductible for individuals who itemize on This line is also for federal conformity deductions.
federal Schedule A.
● Research and experimental expenditures. Note: Do not enter any federal adjustments solely because the
● Amounts paid for medical insurance and long term care. deduction is available to an individual on the federal 1040 or the
Ohio IT 1040.
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For more information, see Ohio Conformity Updates at tax.ohio.gov. Line 42a - Property Owned
See R.C 5701.11. Within Ohio: Enter the average value of all Ohio property owned
by the business during the tax year.
Line 40 – Exempt Gains from the Sale of Ohio State or Local
Government Bonds Total Everywhere: Enter the average value of all property owned
by the business during the tax year.
If included in federal income:
● Deduct interest income and gains from the sale or disposition of Property owned by the business is valued at its original cost.
Ohio public obligations and Ohio purchase obligations and income
from a certain transfer agreement or an enterprise transferred Line 42b - Property Rented
under that agreement. Within Ohio: Enter the average value of all Ohio property rented
● Add any loss from the sale or disposition of Ohio obligations. by the business during the tax year.
See R.C. 5747.01(A)(8). Total Everywhere: Enter the average value of all property rented
by the business during the tax year.
Line 41 – Total Deductions
Property rented by the business is valued at eight times the net
This line must equal the sum of line 37 through line 40. A difference annual rental rate (annual rental expense less subrental receipts).
will delay processing of the return and may result in a billing or reduced
refund. Payroll Factor
Schedule IV – Apportionment Formula The payroll factor is the ratio of:
The three apportionment factors are property and payroll, each Total compensation in Ohio
weighted at 20%, and sales, weighted at 60%, for a total of 100%. Total compensation everywhere
However, if any factor’s “total everywhere” is zero, the weights of the
remaining factors must be proportionately increased so that the total “Compensation” means any form of remuneration paid by the PTE,
remains 100%.You must show the reweighted factors by crossing or other PTEs owned by the PTE, to an employee for personal
out the listed weights and replacing them with the correct weights. services. Compensation does not include any of the following:
● Amounts paid to employees for services unrelated to a trade
Example: ABC LLC is a single-member LLC with no employee
or business;
payroll. In calculating its Ohio apportionment ratio, ABC LLC must
● Amounts reclassified as a distributive share of income from a
reweight its property factor to 25% and its sales factor to 75%.
PTE under R.C. 5733.40(A)(7); AND
If a PTE owns an interest in other PTEs, when calculating its ● Amounts paid to employees who are primarily engaged in
apportionment ratio, the PTE must include its proportionate share of qualified research.
other PTEs “Within Ohio” portion and the “Total Everywhere” portion
of property, payroll and sales. These amounts will be reported by Note: Compensation paid to certain employees at an urban job
and enterprise zone facility, for which Ohio has issued a Tax
the other PTEs in the “Entity Apportionment Percentage” section
Incentive Qualification Certificate, should be included only in total
of the Ohio IT K-1 issued to the PTE-owner.
compensation everywhere.
Note: A PTE may request, in writing with a timely filed original return
See R.C. 5747.21(B), 5733.05(B)(2)(b) and 5709.65.
or amended return, an alternative form of apportionment instead
of the method listed above. Such request is only valid if approved Line 43 - Payroll
by the Department.
Within Ohio: Enter the total compensation paid in Ohio during the
See R.C. 5747.231, 5747.21 and 5733.05(B)(2). tax year. Compensation is paid in Ohio if:
● The employee’s job is entirely in Ohio;
Property Factor ● The employee’s job is primarily in Ohio with only incidental
The Property Factor is the ratio of: work outside Ohio;
● The employee performs services in Ohio and either the
Average value of property in Ohio headquarters, or, if no headquarters exists, the place from which
the service is directed or controlled, is in Ohio; OR
Average value of property everywhere ● The employee is a resident of and performs some services in
“Property” includes any real and tangible personal property that is Ohio, and the headquarters or the place from which the service
owned, rented, subrented, leased and/or subleased in the course of is directed or controlled is not in any state in which some part
a trade or business by the PTE or other PTEs owned by the PTE. of the service is performed.
Property does not include any of the following: Compensation paid to any employee of a common or contract motor
● Construction in progress; carrier who performs regularly assigned duties in more than one
● Property not used in a trade or business; state should be assigned to Ohio by the ratio of mileage traveled by
● Property for which Ohio has issued an air, noise, or industrial the employee in Ohio to the total mileage traveled by the employee
water pollution control certificate; everywhere during the taxable year.
● Property used exclusively during the tax year for qualified
research. Enter the total compensation paid everywhere
Total Everywhere:
Note: The original cost of qualifying improvements to property during the tax year.
in an enterprise zone, for which Ohio has issued a Tax Incentive
Qualification Certificate, should only be included in Total Everywhere. Sales Factor
The “average value” of business property is calculated by averaging The sales factor is the ratio of:
the total value of all applicable property owned or rented at the
beginning and end of the tax year. Sales in Ohio
See R.C. 5747.21(B), 5733.05(B)(2) and 5709.65. Sales Everywhere
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“Sales” includes gross business receipts earned by the PTE or other Additionally, if this credit is based on the PTE’s ownership of another
PTEs owned by the PTE, such as: PTE that holds the certificate, the PTE must also include, when
● Receipts from the sale of real property, tangible personal filing its return, documentation of the portion of the credit to which
property, or services; the PTE is entitled. For credits approved after September 13, 2022
● Receipts from rents and royalties from real and tangible and before July 1, 2024, the maximum annual credit amount was
personal property; OR increased from $5,000,000 to $10,000,000 per taxable year, and
● Receipts from the transfer of or the right to use intellectual the entire credit can be taken as a refundable credit.
property such as trademarks, trade names, patents, and
copyrights. For additional information about the requirements for this credit or
the new enhanced credit visit development.ohio.gov, or call 1-800-
“Sales” does not include: 848-1300. See R.C. 5747.76 and 149.311(I).
● Interest and dividends;
● Receipts from the transfer of intangible property other than Line 47 – Jobs Creation Credit and Job Retention Credit
trademarks, trade names, patents, copyrights or other similar These credits are granted by the Ohio Department of Development,
intellectual property; (ODOD). To claim the credit, the PTE must attach a copy of the
● Receipts from the transfer of real or tangible personal property certificate from ODOD that indicates the amount of the credit and
that is either a capital asset or an Internal Revenue Code the tax year for which the credit is awarded. Additionally, if this
section 1231 asset; AND credit is based on the PTE’s ownership of another PTE that holds
● Receipts from sales to certain public utilities, insurance the certificate, the PTE must also include, when filing its return,
companies, and financial institutions described in R.C. documentation of the portion of the credit to which the PTE is
5733.05(B)(2)(c). entitled. This amount can be refunded, in whole or in part, to the
Note: Income amounts excluded from the sales factor may still be extent that it exceeds the PTE’s total Ohio tax liability.
considered business income under Ohio law. For additional information about the requirements for this credit,
See R.C. 5747.21(B) and 5733.05(B)(2)(c). visit development.ohio.gov, or call 1-800-848-1300.
See R.C. 5747.058(A), 122.171, and former R.C 122.171(B).
Line 44 – Sales
Line 48 – Pass-Through Entity Credit
Within Ohio: Enter gross receipts from sales within Ohio during
the tax year. Sales within Ohio include all the following: This credit is for taxes paid on the PTE’s behalf by another PTE on
● Receipts from sales of tangible personal property, less returns its form IT 4708, IT 4738, or IT 1140. To claim this credit, attach a
and allowances, to the extent the property was received by the copy of the IT K-1 issued to this PTE reporting:
purchaser in Ohio; ● Income taxes paid by the PTE (IT K-1, line 3); AND/OR
● Receipts from services to the extent the purchaser ultimately ● Indirect PTE credits (IT K-1, line 4) from taxes paid by a PTE
used or received the benefit of the services in Ohio; the PTE indirectly owns.
● Rents and royalties from tangible personal property to the extent If the PTE does not have an IT K-1, the PTE must provide a narrative
the property was used in Ohio; and/or diagram, including ownership percentages and FEINs,
● Receipts from the transfer of certain intellectual property to the detailing the ownership structure of the PTEs.
extent the property was used in Ohio;
● Receipts from the right to use certain intellectual property See R.C. 5747.059, 5747.08(I) and 5747.39.
to the extent the receipts are based on the right to use the
property in Ohio; Line 49 – Venture Capital Credit
● Receipts from the sale of real property located in Ohio; AND This credit is granted by the Ohio Department of Development,
● Rents and royalties from real property located in Ohio. (ODOD). To claim the credit, the PTE must attach a copy of the
Note: For tangible personal property, where the property is “received certificate from ODOD that indicates the amount of the credit and
by the purchaser” is not the same as where the purchaser takes the tax year for which the credit is awarded. Additionally, if this credit
physical or legal possession. Instead, it is considered “received” is based on the PTE’s ownership of a PTE that holds the certificate,
where it is ultimately used by the purchaser. the PTE must also include, when filing its return, documentation of
See R.C. 5733.05(B)(2)(c)(i) and (ii). the portion of the credit to which the PTE is entitled. This amount
can be refunded, in whole or in part, to the extent that it exceeds
Total Everywhere: Enter the gross receipts from sales everywhere the PTE’s total Ohio tax liability.
during the tax year.
For additional information about the requirements for this credit, visit
Schedule V – Refundable Business Credits development.ohio.gov or call 1-800-848-1300. See R.C. 5747.80.
Certificates from the Ohio Department of Development Line 50 – Motion Picture & Broadway Theatrical Production
(ODOD) and/or IT K-1(s) must be included to verify each Credit
! refundable credit claimed. This credit is granted by the Ohio Department of Development,
CAUTION (ODOD). To claim the credit, the PTE must attach a copy of the
certificate from ODOD that indicates the amount of the credit and
The PTE can only claim the distributive share of direct and indirect the tax year for which the credit is awarded. Additionally, if this credit
refundable business credits attributable to those investors whose is based on the PTE’s ownership of a PTE that holds the certificate,
income is included on this return. the PTE must also include, when filing its return, documentation of
Line 46 – Historic Preservation Credit the portion of the credit to which the PTE is entitled. This amount
can be refunded, in whole or in part, to the extent that it exceeds
This credit is granted by the Ohio Department of Development, the PTE’s total Ohio tax liability.
(ODOD). To claim the credit, the PTE must attach a copy of the
certificate from ODOD that indicates the amount of the credit and For additional information about the requirement for this credit, visit
the tax year for which the credit is awarded. the Ohio Department of Development’s website at development.
ohio.gov, or call 1-800-848-1300.
See R.C. 5747.66.
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Column B: Enter the depreciation expense add-back.
Schedule VI - 168K Bonus Depreciation and 179 Expense Column C: Enter the ratio used (5/6, 2/3, or 6/6) to calculate the
Add-back Schedule depreciation expense add-back.
Column D: Enter the deduction period based on the following chart:
Prior tax year add-back amount and add-back ratio. Deduction
Add-back Ratio Period
Line 53 - Total Current Year §168K Bonus Depreciation and 5/6 5 Years
§179 Expense Add-Back 2/3 2 Years
6/6 6 Years
Total current year add-back from line 34.
Column E: Divide the amount in Column B by Column D. This is the
ADD-BACK “annual depreciation deduction amount” for the deduction period.
Source of
§179 §168(k) Add-back Add-back Report the amount on line 38.
Depreciation Add-back Amount Ratio (2/3, Amount Note: In a given tax year, the PTE may need to report a mixture of
Amount 5/6, 6/6)
add-back ratios on Schedule VI, due to investment in multiple PTEs.
In this scenario, check the 5/6 box and provide an explanation of
the ratio. The PTE may wish to attach this explanation to future
years’ returns.
Follow the same procedure for the investors of the PTE on the IT
Total add-back K-1 under Depreciation Information and fill out the Supplemental
for tax year: Information portion.
Line 54 - Prior Years Add-Back Amount and Applicable Add- Schedule VII – Investor Information
Back Ratio
Provide information for all investors in the PTE. First list investors
Use this table to calculate the current deductions from prior year whose income is included on the return, in order from highest to
add-back amounts and applicable ratios and report on line 38. lowest ownership percentage. Then list the remaining investors from
Line 54: Deduction Worksheet highest to lowest ownership percentage. Indicate investors included
A B C D E on the return by checking the appropriate box.
Add-back
Tax Year Source of Depreciation Ratio (2/3, 5/6, Deduction Annual Complete investor information must be on both of the following
Add-back 6/6) Period Depreciation
Depreciation Amount Deduction ● Schedule VII and additional sheet(s), if necessary; AND
Amount
2021 ● A copy of IT K-1s, which the PTE will issue to each investor
2020
2019
2018
2017
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IT 4708
Rev. 12/22
Apportionment Formula for Financial Institution Pass-Through Entities
For a pass-through entity that is a financial institution, the apportionment formula should be calculated in accordance with Ohio Revised
Code (R.C.) 5733.056. Use of this worksheet to calculate the apportionment formula for a pass-through entity that is a financial institution.
Note: All ratios are to be carried to six decimal places.
Apportionment Ratio (1) (2) (3)
Ohio Everywhere Ratio
Sales Factor – R.C. 5733.056(F)
1. Receipts from the lease, sublease or rental of real property ....................
2. Receipts from the lease or rental of tangible personal property ...............
3. Interest from loans secured by real property ............................................
4. Interest from loans not secured by real property ......................................
5. Net gains from the sale of loans secured by real property .......................
6. Net gains from the sale of loans not secured by real property .................
7. Interest and fees charged to credit card holders ......................................
8. Net gains from the sale of credit card receivables ...................................
9. Credit card issuer’s reimbursement fees ..................................................
10. Receipts from merchant discount .............................................................
11. Loan-servicing fees from loans secured by real property.........................
12. Loan-servicing fees from loans not secured by real property...................
13. Loan-servicing fees for servicing the loans of others ...............................
14. Receipts from services not otherwise apportioned...................................
15. Interest, dividends, net gains and other income from both
investment assets and activities and trading assets and activities...........
Check method: Avg. value method Gross income method
16. Certain other receipts ...............................................................................
17. Total. Enter ratio here and on Summary, line 1, below ............................. ÷ =
Property Factor – R.C. 5733.056(D) Ohio Everywhere
18. Average cost of real property and tangible personal property owned .....
19. Gross rents payable on real and tangible personal property x 8 .............
20. Loans and credit card receivables ...........................................................
21. Total. Enter ratio here and on Summary, line 2, below ............................ ÷ =
Payroll Factor – R.C. 5733.056(E)
Ohio Everywhere
22. Compensation paid to employees. Enter ratio here and on
Summary, line 3, below ............................................................................
(1) (2) (3)
Factor ÷ Weight = Weighted Factor
Apportionment Ratio Summary
1. Sales (line 17) ......................................................................................... x .70 =
2. Property (line 21) ..................................................................................... x .15 =
3. Payroll (line 22) ....................................................................................... x .15 =
4. Total weighted apportionment ratio ............................................................................................................................
If the denominator of any factor is zero, the weight given to the other factors must be proportionately increased so that the total weight
given to the combined factors used is 100%.
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IT 4708
Rev. 12/22
Appendix A
Investment Pass-Through Entities (IPTE)
What is an IPTE?
An IPTE is a PTE that meets both of the following:
● 90% of its gross income from intangible sources, which may include the following: loan and financing fees, dividend income,
interest income, net capital gains from the sale or exchange of intangible property and distributive share of income from other
PTEs (list is not all inclusive)
● 90% of its net book value classified as intangible assets
The percentages are based upon quarterly averages calculated during the PTE’s tax year.
For additional types of intangible income and more information, see R.C. 5733.401.
What are the benefits of being an IPTE?
An IPTE can exclude from its adjusted qualifying amount certain investment income and income it receives from other PTEs,
such as all types and classifications of income from an investment pass-through entity (IPTE) attributable to the distributive
shares of income from other PTEs and certain other net income items.
See R.C. 5733.401
How should an IPTE file?
An IPTE can file the IT 1140, IT 4708 or IT 4738. The IT 1140 or IT 4738 shows the flow of income and indirect credits to the entity’s
investors/owners, while the IT 4708 may allow the IPTE to request a refund.
How Should an IPTE File the IT 4708?
To receive a refund of refundable business credits including payments made by another PTE (refundable PTE credit), the
PTE should file the IT 4708. The return should include only the income and credits in proportion to those investors included on
the return.
To verify the income and credits of the investor(s) an IPTE should complete the return as follows:
● Report income received by the IPTE on line 1 and the deductions on line 2 (complete Schedules II and III to populate lines 1
and 2);
● Deduct certain investment income, described in R.C. 5733.401(C), not subject to tax because the PTE is an IPTE on line 4;
● Use line 8 to proportionately allocate the income to Ohio;
● Any income and credits will be distributed proportionately to the qualifying investors directly on line 3 of the IT K-1; any
overpayment is refunded to the entity.
Please attach the following:
● A copy of the federal return;
● An IT K-1 for each investor that shows the proportionate share of the income and credits being passed to the IPTE’s investors
from another PTE. Direct credits should be listed on line 3 of the IT K-1;
● The IT K-1(s), federal K-1(s) and/or other supporting documentation and statements showing the source of income and credits
from each PTE included on the IPTE’s return.
See R.C. 5747.221
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