In an effort to speed tax receipts into the next fiscal year, Ohio and Kentucky recently signed tax amnesty measures that would allow those who owe back taxes to pay at a reduced interest rate with little or no penalty.
The Ohio amnesty program began Tuesday and is only available until June 15. Taxpayers who have certain unpaid state taxes from prior to May 2011 can pay those taxes and half of the interest due, and the remaining interest and all penalties will be waived. The program covers individual income tax, commercial activity tax, sales and seller’s use tax, employer withholding tax and corporate franchise tax, and state officials estimate it could bring in $40 million.
The Kentucky amnesty program will be in effect from July 1, 2012, through June 30, 2013, and it applies to tax liabilities incurred between December 1, 2001, and October 1, 2011. Nearly all Kentucky tax liabilities will be eligible for the amnesty program. In order to qualify for amnesty, taxpayers must pay all of the back taxes and half of the interest due, then file all tax returns and make all tax payments on time for the next three years.
Kentucky will allow installment payments, as long as the amnesty amount is paid in full by May 31, 2013. Ohio requires the full amnesty amount to be paid by June 15.
A Kentucky taxpayer who owes back taxes and opts not to participate in the amnesty program will be assessed additional penalties if the state uncovers his or her unpaid taxes in the future.
For more on the tax amnesty programs, or any of your tax needs, contact a member of the Barnes Dennig tax team at (513) 241-8313.