The Ohio Department of Taxation (ODT) recently published new instructions which modify the way businesses request a refund when there is over-withholding. ODT still uses the Withholding Tax Application for Refund (Form WT-AR), but now limits the circumstances in which filers may use the form to request a refund.
Generally, if over-withholding occurs, it will typically be discovered during the subsequent period in the cycle or at the end of the year when annual reconciliation documentation is filed. If the over-withholding is discovered during a subsequent period in the cycle, ODT states filers should make an adjustment in tax due reported in the next filing cycle. If over-withholding is discovered during the course of annual reconciliation, ODT instructs filers to address the issue with an amended Form IT-941 or IT-942 (documents typically filed for the purpose of annual reconciliation).
ODT does recognize there are certain situations where a more timely refund is necessary, and reserves the use of Form WT-AR for those circumstances. These include:
- Erroneous payments made to ODT that was intended for a non-ODT entity;
- Excessive or duplicate payments;
- Situations in which a return is filed with payment in error that would cause financial hardship if not refunded immediately (e.g. mistakenly paying $300,000 instead of $3,000);
- Payment of school district income tax when no employees live in said district.
If a filer believes they qualify to file for a refund using Form WT-AR, they must e-mail ODT at EWT@tax.state.oh.usstating their reasons, and ODT will provide further instructions on how to file if it is appropriate.
For greater detail on how this changes filing options for refunds, please see the attached document or visit the Ohio Department of Taxation for additional information.
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