Penalties and Fees for Paying Ohio Income Tax Late

The tax deadline passed this year, and you have not filed your Ohio State Tax Return. You are not alone. Many taxpayers procrastinate. It is easy to get busy and put your taxes to the side, while you wait to receive all the necessary forms. Before you know it, the deadline has rolled past. Now, that you have missed the deadline, it can feel easy just to forget about filing. They are already late, right? If you are filing your taxes past the deadline, it is important you file as quickly as possible to reduce the penalties and fees for paying your Ohio Income Tax late.

What is the Penalty for Filing Ohio Income Tax Late?

Like with federal and most state tax returns, at least initially, the penalty for failure to file your Ohio Income Tax Return is greater than the penalty for failure to pay. This is why it is extremely important to file or file an extension, even if you cannot afford to pay. You will still owe interest on the amount of taxes that are past due, if you did not pay them by the tax deadline. However, filing your tax return or an extension by the deadline will help you avoid the penalty for failure to file. Also, filing an extension may help you avoid the interest for failing to pay your Ohio Income Tax by the deadline, if you paid 90% or more by the deadline. Typically, the tax deadline is April 15th, but the date can differ, if it falls on a weekend or holiday.

Ohio Income Tax Return Extension

Ohio does not have a separate state extension form. However, the Ohio Department of Taxation automatically grants a 6-month extension, if you file a federal extension. Typically, this extension will give you until October 15 of the current year to file your Ohio Income Tax Return for the previous calendar year. Since Ohio does not have its own form for filing an extension, you must file a federal extension to receive one for your Ohio Income Tax Return.

Ohio Penalty for Failure to File

If you fail to file your Ohio Income Tax Return or federal extension by the tax deadline, a failure to file penalty of the greater of $50 per month up to a maximum of $500, or 5% per month up to a maximum of 50% of the tax, may be charged. To avoid this penalty, even if you cannot pay your Ohio Income Tax balance, it is important you either file your Ohio Income Tax Return or a federal extension by the tax deadline.

Ohio Interest for Failure to Pay

If you do not pay the full amount of tax you owe to Ohio Treasurer of State by the tax deadline, an interest rate of 3% will apply. If you file a federal extension and have paid 90% or more of your total Ohio Income Tax, the 3% interest may not apply. If the interest is applied, it will be charged from the deadline the tax should have been paid. Typically, the deadline is April 15.

What if You are Owed a Refund

The Ohio penalty for failure to file and interest charged for failure to pay is based on you having a tax liability. If you do not owe taxes, for example, you have paid your Ohio Income Tax in full by the deadline or you are owed a refund from Ohio, the penalty for failure to file and interest for failure to pay will not apply. However, one of the worst things to happen is to think you are owed a refund only to find out in addition to owing taxes, you now owe penalties and interest as well.

To avoid this situation and delinquency billings, even if you do not owe Ohio Income Tax, Ohio Department of Taxation recommends you file an Ohio Income Tax Return, if your federal adjusted gross income is greater than $13,200. Also, if you are owed a refund, you have a limited amount of time to claim it.

The Bottom Line

If you have failed to file your Ohio or federal income tax return, it is extremely important that you file your return as soon as possible to avoid the penalty for failure to file and interest from continuing to accumulate. Filing a federal extension will give you a 6-month extension to file both your Ohio or federal income tax return. Filing a federal extension may help you avoid having to pay the Ohio failure to file penalty. If you file a federal extension and by the tax deadline, you have paid 90% or more of your Ohio Income owed, you may not owe the interest on the balance owed either.

If you have failed to file your Ohio or federal income tax return,  schedule an appointment with the tax professionals at Gudorf Tax Group. They will be able to review your individual tax situation and advise you on the best course of action to get you caught up with your state and federal tax filings and stop penalties and interest from accumulating.

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