ProConnect HelpIntuit HelpIntuit

Identifying business income and activities on Individual OH Schedule IT-SBD and Form IT-2023/IT NRC Information

SOLVEDby IntuitLacerte Tax2Updated July 14, 2022

This article will help you correctly define business activities and apportion income for OH Schedule IT-SBD and Form IT-2023/IT NRC Information.

  • Page 1 of Form IT-SBD is produced for every business activity with income apportioned to Ohio.
  • Page 2 of the IT-2023 is produced for every business activity (part-year and non-residents only).
    • For 2015 and later, Form IT-NRC replaced the IT-2023.
  • Every Schedule C activity, Schedule E activity (Rentals and Pass-throughs), Farm activity, and other income defined as self-employment income is considered a business activity.
  • When interest, dividends, capital gains, and ordinary gains are considered business income, they must be associated with one of the business activities.
  • Additionally, adjustments for self-employment tax, Keogh deduction, self-employed health insurance deduction, and domestic production activities deduction are considered adjustments to business income and must be associated with one of the business activities.

All program assumptions can be overridden for each activity on Screen 50.121, Ohio Business Income Allocation and Apportionment.

  • For Schedule C and Farm activities, the program uses apportionment data entered in the State and City Apportionment input section for those activities to calculate an apportionment percent.
    • When apportionment data isn't entered, the program assigns an apportionment percent to the activity based on the state sourcing of income for those activities.
  • For rentals and pass-through activities, the program uses apportionment data entered in the Apportionment section of Screen 50.121, Ohio Business Income Allocation and Apportionment to calculate an apportionment percent for those activities.
    • When apportionment data isn't entered, the program assigns an apportionment percent to the activity based on the state sourcing of income for those activities.
  • Capital or ordinary gains entered in the pass-through entity screens is automatically considered business income and associated with the corresponding activity.
  • Gains recognized on the sale of assets that have been entered in the Depreciation screen are automatically associated with the corresponding business.
  • Gains recognized on the sale of assets that have been entered in the Dispositions screen are automatically associated with the business activity indicated in Corresponding Activity Information-Passive (8582)/At-Risk (6198)/Investment Tax (8960)/Qualified Business Income section.
  • Only interest income entered in the pass-through entity screens is automatically considered business income and associated with the corresponding activity.
  • Other interest income that should be considered business income must be manually tied to a business activity in Screen 50.121, Ohio Business Income Allocation and Apportionment.
  • Only dividend income entered in the pass-through entity screens is automatically considered business income and associated with the corresponding activity.
  • Other dividend income that should be considered business income must be manually tied to a business activity in Screen 50.121, Ohio Business Income Allocation and Apportionment.
  • Each rental activity entered in Screen 18 is considered a separate business activity.
  • To combine all the rentals into one activity:
    1. Go to Screen 50.121, Ohio Business Income Allocation and Apportionment
    2. Choose Non-business Income on the left-hand side of the screen.
    3. Check the box Report rentals as one activity.
    4. Check the box Report rentals as non-business income to exclude the rentals from the business income calculations.
  • The SE tax and Keogh deduction are automatically associated with a business activity based on a ratio of SE income from that activity to total SE income.
  • The SE health Insurance deduction is only automatically associated with a business activity if there's an entry in the SE Health Insurance section of Screen 24 indicating a specific business activity.

The Ohio depreciation adjustment is only automatically allocated to the first Schedule C activity.

Use the corresponding input code in Screen 50.121, Ohio Business Income Allocation and Apportionment to manually associate the adjustment for domestic production activity deduction with the appropriate business activity(s).

If there's no indication in the SE Health Insurance section of Screen 24, Adjustments to Income, the SE health insurance deduction must be manually associated with the appropriate business activity(s) using the corresponding input code in Screen 50.121, Ohio Business Income Allocation and Apportionment.

Interest income that should be considered business income and wasn't entered in the pass-through entity screens must be manually associated with the appropriate business activity(s) using the corresponding input code in Screen 50.121, Ohio Business Income Allocation and Apportionment.

Dividend income that should be considered business income and wasn't entered in the pass-through entity screens must be manually associated with the appropriate business activity(s) using the corresponding input code on Screen 50.121, Ohio Business Income Allocation and Apportionment.

  • Gains must be manually entered with the appropriate business activity(s) if:
    • They weren't entered in the pass-through entity screens, sold through the depreciation screen, or sold through the Dispositions screen with the appropriate indicator.
  • Use the corresponding input code in Screen 50.121, Ohio Business Income Allocation and Apportionment to manually associate gains with business activity(s).
  • If the Ohio depreciation adjustments aren't associated with the first Schedule C, then they must be manually associated with the appropriate business activity(s) using the corresponding input code in Screen 50.121, Ohio Business Income Allocation and Apportionment.
  • Additionally, the amounts automatically reported on the first Schedule C must be adjusted in Screen 50.121.

Was this helpful?

You must sign in to vote, reply, or post
Lacerte Tax

Sign in for the best experience

Ask questions, get answers, and join our large community of Intuit Accountants users.