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How to resolve ProConnect Tax diagnostic Ref 10120 - OH apportionment percent has been calculated

by ProConnect Tax Online 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. (ref. #10120)

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

  1. Go to Input Return State & Local Income OH Bus Inc Alloc and Apport.
  2. Select the appropriate activity in the Activity dropdown options.
  3. Enter the activity number in the field Activity number (blank for Other SE Income).
  4. Scroll down to IT-NRC Apportionment.
  5. 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 under Ohio Business Income Allocation and Apportionment in the IT-NRC Apportionment section to remove the diagnostic.
  • If none of the income is Ohio income, enter -1 in the override field, Ohio apportionment factor (O).

Form IT-2023 was used prior to 2015 and is used to determine the nonresident and part-year credit. For 2015 and later, Ohio began using Form IT NRC for these credits. The instructions state that business income must be apportioned, not allocated. ProConnect 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. Make adjustments if necessary.

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