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How to resolve Lacerte diagnostic ref. 10120 - OH apportionment percent has been calculated

by Lacerte Tax 2023 Updated 7 months ago

This article will help resolve the following diagnostic for the Ohio apportionment provision.

  • An apportionment percent has been calculated for one or more business activities based on the state sourcing of income for that activity.  The apportionment percent calculated in this manner may not meet the required Ohio apportionment provision.  Generally, pass-through activities are considered business activities.  To properly complete the apportionment factors for each business enter the appropriate apportionment factors for each activity in screen 50.121 (State Income). (ref. #10120)

To resolve the diagnostic and input information for Form IT NRC:

  1. Go to Screen 50, Income.
  2. Locate the Ohio Business Income Allocation and Apportionment section.
  3. Select the appropriate activity in the Activity dropdown options.
  4. Enter the activity number in the field Activity number (blank for Other SE Income).
  5. Select IT-NRC Apportionment from the lower left section menu.
  6. Enter the appropriate amounts for Property owned, Property rented, Payroll and Sales under the subsections Everywhere and Within Ohio. 

Additional notes

  • All business entities on a return, whether Ohio income is present or not, must be entered in Screen 50.121, Ohio Business Income Allocation and Apportionment in the IT-NRC Apportionment section to remove the diagnostic.
  • To add additional business entities, select the Add button from the left menu under Business Activity and repeats the steps above.
  • If none of the income is Ohio income, enter -1 in the override field, Ohio apportionment factor (O).

For tax year 2015 and newer:

For 2015 and newer, Ohio began using Form IT NRC for these credits. The instructions state that business income must be apportioned, not allocated. Lacerte automatically apportions based on how the amounts are allocated in the different business input screens, but this may not be correct based on OH apportionment rules. Use Screen 50.121 to make adjustments if necessary.

For tax years 2014 and prior:

Form IT-2023 was used prior to 2015 and is used to determine the nonresident and part-year credit.

Lacerte Tax

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