How to Fill Out Ohio Form IT-4708 (w/Examples) + FAQs

Ohio Form IT-4708 is the Pass-Through Entity Composite Income Tax Return that partnerships, S corporations, and LLCs taxed as partnerships file with the Ohio Department of Taxation to report and pay Ohio income tax on behalf of their qualifying nonresident investors. The form lets the entity pay the tax in one composite check so each nonresident owner does not have to file a separate Ohio IT 1040.

The 2025 tax year version (Rev. 10/25) carries the 3.0% top individual rate and a 2.75% rate for trust investors, and a misfiled IT-4708 can trigger a late-file penalty equal to the greater of $50 per month (capped at $500) or 5% per month of the unpaid tax (capped at 50%) under Ohio Revised Code 5747.15. The Ohio Department of Taxation processes roughly 28,000 pass-through composite filings each year, and internal audit data shows nearly 18% of paper IT-4708 returns are kicked back for math or apportionment errors on Schedule IV.

Here is what this guide delivers:

• 📋 A field-by-field walkthrough of every line, box, and schedule on the 2025 IT-4708
• 🧾 Three filled-out scenarios using real-world pass-through entities
• 💻 Step-by-step filing instructions for the Ohio Business Gateway and approved software
• ⚠️ The 12 most common mistakes that trigger Ohio Department of Taxation rejection notices
• ⚖️ A side-by-side comparison of IT-4708 vs. IT-1140 vs. the elective IT-4738

What Form IT-4708 Is and Who Must File It

Ohio Form IT-4708 is a composite income tax return. A pass-through entity (PTE) uses it to combine the Ohio-source income of two or more qualifying nonresident investors and pay the tax in one shot. The entity itself does not pay tax on resident-investor shares because residents must file their own Ohio IT 1040.

The authority to file IT-4708 comes from Ohio Revised Code 5747.08(IV), which lets a PTE elect to file on behalf of its qualifying investors. The election is annual and investor-by-investor, meaning a PTE can include some nonresidents on the IT-4708 and leave others off. Investors included on a IT-4708 are not required to file their own Ohio individual return for that year, unless they have other Ohio-source income.

A PTE must file IT-4708 (or instead file IT-1140 or the elective IT-4738) if it has at least one qualifying nonresident investor with Ohio-source income above the de minimis threshold. Single-member LLCs, sole proprietorships, and disregarded entities never file IT-4708 because they have no separate investors. Trusts file Ohio IT 1041 and corporations subject to the Commercial Activity Tax follow a separate track.

The composite return is not mandatory. A PTE can choose IT-1140 (a withholding return) or, since 2022, the elective IT-4738 electing pass-through entity tax that captures both residents and nonresidents and works around the federal SALT cap. The choice locks in for the year, so picking wrong can cost real money.

Before You Start: Documents and Information You Need

Walking into the IT-4708 cold is a recipe for amended returns. Gather every item below before you open the form, because each one feeds a specific line and missing data forces you to estimate, which the Ohio Department of Taxation can disallow.

• Federal Form 1065 or 1120-S with all schedules and statements, because Line 1 of IT-4708 starts with federal ordinary business income.
• All federal Schedule K-1s for every investor, because each investor’s share drives the apportionment and the credit allocation.
• Ohio IT K-1 for each tier-up investor, because pass-through credits and add-backs flow only on the IT K-1, not the federal K-1.
• Prior-year IT-4708 including any IT-4708ES estimated payment vouchers, because the carryforward overpayment reports on Line 19.
• Ohio sales, property, and payroll figures for the apportionment ratio on Schedule IV under ORC 5733.05(B).
• Schedule of Investors listing each owner’s name, FEIN/SSN, residency, ownership %, and whether they are included on the composite, because Schedule VI requires every line.
• Other-state composite returns or K-1s showing tax paid to other states, because the resident-credit allocation flows through to the IT K-1s you issue downstream.
• Federal Form 7004 extension (if filed), because Ohio honors the federal extension only if a copy is attached to the IT-4708.
• EFT or ACH credit confirmation numbers for any payments made through OBG, because the IT-4708 payment line must match the agency’s deposit record.
• Ohio FEIN and charter number issued by the Ohio Secretary of State, because a missing FEIN bounces the return at intake.

A missing IT K-1 is the single most common cause of a corrected notice. The Ohio Department of Taxation cross-checks the IT K-1s you issue against the IT-4708 line items, and a mismatch triggers a billing notice within 90 days.

Where to Get the Form and How to Access It

The official 2025 IT-4708 lives on the Ohio Department of Taxation forms library. The PDF is fillable, but it is not the filing copy. Ohio mandates electronic filing for IT-4708 under Ohio Administrative Code 5703-7-19, with a hardship waiver available on Form IT-WAIVER.

Three legitimate access points exist. First, the Ohio Business Gateway hosts the IT-4708 under the Taxation service area and walks the preparer through every line. Second, every IRS-approved Modernized e-File (MeF) provider — Drake, CCH Axcess, Lacerte, ProSeries, UltraTax, and TaxAct Business — transmits IT-4708 directly. Third, large preparers can use the Ohio Bulk e-File program for batches over 50 returns.

Always confirm the revision date on the bottom-left corner of page 1. The 2025 form reads Rev. 10/25. Filing a 2024 form for a 2025 year triggers an automatic rejection at MeF because the schema version will not match.

The fillable PDF is fine for worksheet purposes, but printing it and mailing it without an approved waiver violates the e-file mandate and can void the original-return status. That means penalties keep running until the electronic version is accepted.

Step-by-Step: How to Fill Out Form IT-4708 Line by Line

The 2025 IT-4708 has a header block, a 24-line main body, and six schedules (I through VI). Work top-down only after you have completed Schedule VI (Investor Information) because the per-investor totals roll up into the main body.

Header: Tax Year and Period

The top of page 1 asks for the Taxable Year Beginning and Taxable Year Ending in MM/DD/YYYY format. Enter the calendar or fiscal year exactly as it appears on the federal return so the periods match.

A calendar-year filer enters 01/01/2025 and 12/31/2025. A fiscal-year filer with a July year-end enters 07/01/2024 and 06/30/2025.

If the entity has a short year because of a merger or termination, write the actual short-year dates and check the Final Return box. A common edge case is a technical termination under federal rules — Ohio still treats the period as a short year and a separate IT-4708 is required for each part-year.

The most common mistake is leaving these dates blank when using rolled-over software, which makes the return default to the prior period and the agency rejects it as a duplicate. The misconception is that the form auto-populates the period from the FEIN — it does not.

Header: Name, Address, FEIN, and NAICS

Enter the entity’s legal name exactly as it appears on the federal return and the Ohio Secretary of State filing. Use the principal business address, not the registered agent’s address.

Maple Ridge Partners, LLC writes its name in all caps, 123 OAK ST, COLUMBUS, OH 43215, FEIN 31-1234567, and NAICS 531110. The NAICS code must match the principal-activity code on the federal 1065 or 1120-S.

If the entity moved during the year, use the new address and check the Address Change box; otherwise, refund and notice mail goes to the wrong place. A P.O. Box is acceptable only if the entity has no physical Ohio location.

The most common mistake is using the registered-agent address, which causes the agency’s correspondence to be returned undeliverable and the entity loses 30 days of response time. The misconception is that the FEIN alone identifies the entity — Ohio also keys on the legal name, so a name typo can split the account in two.

Header: Entity Type and Filing Status Boxes

Check exactly one entity-type box: Partnership, S Corporation, or LLC. Then check any applicable status boxes: Initial Return, Final Return, Amended Return, or Federal Extension Filed.

A new LLC that elected partnership taxation in 2025 checks LLC and Initial Return and writes 01/01/2025 as the Date Began Business in Ohio.

If the entity is filing an amended IT-4708 to correct a prior tax year, check Amended Return and attach a one-page narrative explaining each change. The narrative is required by ORC 5747.10.

The most common mistake is checking Final Return when the entity merely stopped having Ohio nonresidents — that flag closes the Ohio account and forces a reapplication. The misconception is that the federal extension auto-extends Ohio; Ohio honors the federal extension only when the box is checked and a copy of the Form 7004 is attached.

Line 1 — Total Distributive Income From Federal Return

Line 1 asks for the entity’s total income from federal Form 1065, Schedule K, or 1120-S, Schedule K, summed across ordinary income, separately stated items, and guaranteed payments. Pull the figure from the federal Schedule K Analysis of Net Income line.

A partnership with $480,000 of ordinary income, $20,000 of interest, and $50,000 of guaranteed payments enters 550,000 on Line 1.

If the entity has both passive and active income, do not net them — Line 1 is gross of investor-level limitations. Section 179 expense flows through here as a negative amount.

The most common mistake is using only ordinary business income and ignoring separately stated items, which understates the base and triggers a Schedule II add-back mismatch. The misconception is that tax-exempt interest is excluded; it is included on Line 1 and removed on Schedule II as a deduction.

Line 2 — Add-Backs From Schedule II

Line 2 captures statutory add-backs such as the IRC §168(k) bonus depreciation add-back, the §179 add-back over $25,000, and the related-member interest add-back under ORC 5733.0511. Compute the total on Schedule II and bring it forward.

A PTE that took $100,000 of bonus depreciation federally adds back 5/6 ($83,333) on Schedule II Line 2a, then enters 83,333 on Line 2 of the main form.

Edge case: if the entity is in its first year of bonus depreciation, the 5/6 add-back applies; in subsequent years, the entity claims the 1/6 deduction on Schedule II Line 2b until fully recovered.

The most common mistake is forgetting the bonus depreciation add-back, which is the single most-audited line on the IT-4708 and almost always produces a billing notice. The misconception is that the add-back disappears after year one — it does not; only the deduction phase begins.

Line 3 — Deductions From Schedule II

Line 3 captures statutory deductions: the prior-year bonus depreciation 1/6 recovery, the §168(k) catch-up, and the qualifying interest income from ORC 5747.01(A).

If our PTE has $20,000 of recovery from a 2022 bonus add-back, it enters 20,000 on Line 3.

A subtle nuance: deductions are taken at the entity level, not the investor level, so the IT K-1 you issue to each investor must reflect the deduction on a pro-rata basis.

The most common mistake is double-deducting at both the entity and investor level, which the agency catches via IT K-1 reconciliation. The misconception is that all federal deductions flow automatically; only the items specifically listed in Schedule II qualify.

Line 4 — Adjusted Qualifying Amount

Line 4 is the math result: Line 1 + Line 2 − Line 3. This is the Ohio adjusted qualifying amount before apportionment.

Using the running example: 550,000 + 83,333 − 20,000 = 613,333.

If Line 4 is negative, enter zero; you cannot composite-file a loss return, but the loss does flow through to investors via the IT K-1.

The most common mistake is forgetting to apply the loss-floor of zero, which produces a negative tax. The misconception is that a negative Line 4 generates a refund — it does not for IT-4708 purposes.

Line 5 — Apportionment Ratio (Schedule IV)

Line 5 is the Ohio apportionment ratio, expressed as a decimal carried to six places, computed on Schedule IV using the single-sales-factor formula required by ORC 5747.21.

A PTE with $2,000,000 of Ohio sales and $5,000,000 of everywhere sales enters 0.400000 on Line 5.

The throwback rule was repealed in 2005, so sales to non-Ohio destinations where the entity is not taxable do not throw back to Ohio. Service revenue is sourced to where the benefit is received under ORC 5747.212.

The most common mistake is using a three-factor (sales/property/payroll) ratio out of habit; Ohio is single-sales-factor only since 2005. The misconception is that intercompany sales are excluded — they are included unless the buyer is a disregarded entity.

Line 6 — Apportioned Income

Line 6 multiplies Line 4 by Line 5. This is the Ohio-source income subject to composite tax.

Continuing the example: 613,333 × 0.400000 = 245,333.

If the entity has nonbusiness income (rents from a single Ohio property, gain on sale of an Ohio asset), allocate that on Schedule III rather than apportioning it on Schedule IV.

The most common mistake is apportioning nonbusiness income, which inflates the Ohio base. The misconception is that all rental income is nonbusiness; only rental income that is not part of the regular trade or business qualifies under ORC 5747.20.

Line 7 — Nonresident-Investor Share

Line 7 is the portion of Line 6 attributable only to investors included on this composite return. Pull the percentage from Schedule VI.

If three of five investors (totaling 60% ownership) are on the composite, Line 7 = 245,333 × 0.60 = 147,200.

A nonresident investor who has opted out of the composite (by filing their own IT 1040) is excluded from Line 7 even though they are a nonresident.

The most common mistake is including resident investors in the Line 7 numerator, which double-taxes income because residents will also report on their own IT 1040. The misconception is that all nonresidents must be included; the election is investor-by-investor.

Line 8 — Tax Before Credits

Line 8 multiplies Line 7 by the applicable rate. For 2025, the rate is 3.0% for individual investors and 2.75% for trust investors. If the composite has a mix, compute each tier separately and sum.

For all-individual investors: 147,200 × 0.030 = 4,416.

The 2025 rate dropped from 3.5% in 2024 as part of the multi-year flattening under House Bill 33. Trust investors keep the slightly different 2.75% rate because they are taxed under ORC 5747.02.

The most common mistake is using last year’s 3.5% rate, which overstates tax and creates a refund the agency must process. The misconception is that the rate is a graduated bracket; on IT-4708 it is a flat top rate applied to apportioned income.

Line 9 — Nonrefundable Credits (Schedule V)

Line 9 captures nonrefundable business credits: the Ohio Job Creation Tax Credit, the Research and Development Investment Credit under ORC 5747.331, and the Historic Preservation Tax Credit. Each credit has a separate line on Schedule V.

A PTE awarded a $5,000 R&D credit enters 5,000 on Schedule V Line 4 and carries the total to Line 9.

Nonrefundable credits cannot reduce Line 8 below zero. Excess credit carries forward, with the carryforward period set by the specific credit’s authorizing statute (typically 5 to 7 years).

The most common mistake is claiming a credit certificated to an individual investor on the composite return; certificated credits stay with the named recipient and cannot float to the entity. The misconception is that all credits carry forward; some, like the JCTC, are refundable and belong on Line 13 instead.

Line 10 — Tax After Nonrefundable Credits

Line 10 = Line 8 − Line 9, floored at zero.

Example: 4,416 − 0 = 4,416 if no credits apply.

If Line 10 is zero but Line 8 was positive, the entity may still owe minimum filing fees under no Ohio rule (Ohio has no PTE minimum tax), but the return is still required.

The most common mistake is netting refundable credits here; refundables go on Line 13. The misconception is that a zero Line 10 eliminates the need to file; the IT-4708 is still required if any nonresident investor has Ohio-source income.

Line 11 — Interest Penalty on Underpayment of Estimated Tax

Line 11 reports the underpayment penalty computed on Form IT-2210. A PTE with prior-year tax over $500 must make quarterly estimates by April 15, June 15, September 15, and January 15.

A PTE that owes $4,416 but paid only $2,000 in estimates owes interest on the $2,416 underpayment computed at the federal short-term rate plus 5% — for 2025 the rate is 8%.

If the prior-year tax was zero or under $500, the safe-harbor exception applies and no penalty is due.

The most common mistake is forgetting the safe-harbor exception when prior-year tax was zero, which causes overpayment of penalty. The misconception is that the federal estimated-tax safe harbor (110% of prior-year AGI) applies — Ohio uses 100% of prior-year tax, period.

Line 12 — Total Tax (Line 10 + Line 11)

Line 12 sums tax and penalty. This is the gross liability before any payments.

Example: 4,416 + 0 = 4,416.

If Line 11 is greater than zero, the agency bills the penalty separately even if the tax is paid in full, so reconciling the two lines matters.

The most common mistake is omitting Line 11, which produces an automatic billing notice. The misconception is that timely filing avoids the underpayment penalty — it does not; estimates must also be timely.

Line 13 — Refundable Credits

Line 13 captures refundable credits: the historic preservation refundable portion, the motion picture credit, and the pass-through entity tax credit for tax paid by a tier-up PTE on IT-4738.

A PTE whose upper-tier partnership paid $10,000 of IT-4738 tax claims 10,000 on Line 13 with the upper-tier IT K-1 attached.

If Line 13 exceeds Line 12, the excess refunds to the entity and is not allocated to investors via IT K-1.

The most common mistake is allocating the refundable IT-4738 credit to investor IT K-1s, which creates double-claiming. The misconception is that all credits are refundable; only those listed in Schedule V Part B are.

Line 14 — Estimated Tax Payments

Line 14 reports the sum of all IT-4708ES quarterly payments plus any prior-year overpayment applied forward.

A PTE that paid $1,000 each quarter enters 4,000, plus any prior-year credit from Line 19 of the 2024 IT-4708.

If a payment was made under the wrong FEIN, the agency cannot match it to the return; pull the OBG confirmation number and call (888) 405-4039 before filing.

The most common mistake is double-counting estimates that were already applied as a prior-year credit. The misconception is that estimates can be applied to either IT-4708 or IT-1140 interchangeably; they cannot once designated.

Line 15 — Withholding and Other Payments

Line 15 captures Ohio income tax withheld at the entity level by upper-tier PTEs (reported on the IT K-1 issued to your entity) plus any IT-1140 payments converted to IT-4708 via amended election.

If the entity received an IT K-1 showing $2,500 of Ohio withholding from an upper-tier partnership, enter 2,500 on Line 15.

Edge case: if the upper-tier PTE filed IT-1140 instead of IT-4708, the withholding still flows to your IT-4708 because the law treats both as paid on the investor’s behalf.

The most common mistake is omitting upper-tier IT K-1 withholding because the figure was reported on Line 14 of the K-1 rather than Line 15. The misconception is that federal backup withholding counts here — it does not; only Ohio withholding qualifies.

Line 16 — Total Payments and Credits

Line 16 = Line 13 + Line 14 + Line 15. This is the total credited against Line 12.

Example: 0 + 4,000 + 2,500 = 6,500.

A return where Line 16 exceeds Line 12 produces an overpayment on Line 18; otherwise, Line 17 shows a balance due.

The most common mistake is omitting Line 13 refundables. The misconception is that Line 16 should equal Line 12; only when payments exactly match liability.

Line 17 — Balance Due

If Line 12 > Line 16, Line 17 = Line 12 − Line 16. Pay this amount via OBG ACH debit, ACH credit, or check with Form IT-4708-V payment voucher.

If our PTE owes 4,416 and paid 6,500, Line 17 = zero.

A balance due over $10,000 must be paid electronically under ORC 5747.072; a paper check triggers an automatic 5% penalty.

The most common mistake is mailing a check for a $10,000+ balance and incurring the EFT penalty. The misconception is that the IT-4708-V voucher avoids the e-pay rule — it does not.

Line 18 — Overpayment

If Line 16 > Line 12, Line 18 = Line 16 − Line 12. Continuing the example: 6,500 − 4,416 = 2,084.

The overpayment can refund (Line 20), apply to next year’s estimates (Line 19), or split between the two.

The most common mistake is leaving Line 19 blank when the entity intends to roll forward, which forces the agency to refund and the next year’s estimates start at zero. The misconception is that a refund earns interest from the original due date — Ohio pays interest only after 90 days from the filing date.

Line 19 — Amount Applied to Next Year’s Estimates

Line 19 specifies how much of Line 18 to roll forward. Common practice is to apply 100% if Line 18 is small (under $5,000) or split if a refund is needed.

The PTE applies 2,084 to 2026 estimates and gets no current refund.

Edge case: if the entity files final return, do not apply forward; you cannot use the credit. Use Line 20 to refund.

The most common mistake is applying forward on a final return, which strands the credit. The misconception is that the rollover is automatic — it requires this line to be filled in.

Line 20 — Refund Amount

Line 20 = Line 18 − Line 19. The refund mails to the entity address on file unless the entity provides direct-deposit information in the e-file payload.

If the PTE chooses a refund of $1,084 and rolls $1,000 forward, Line 19 = 1,000 and Line 20 = 1,084.

The most common mistake is splitting unevenly so Line 19 + Line 20 ≠ Line 18, which kicks back at MeF schema validation. The misconception is that the agency picks the split; the filer must specify.

Schedule I — Add-Backs and Deductions Detail

Schedule I provides line-by-line detail behind Lines 2 and 3 of the main form. Each item must reference the federal source schedule and the Ohio statute.

A bonus depreciation add-back of $83,333 references IRC §168(k) and ORC 5747.01(A)(20).

Edge case: if the federal return amended after IT-4708 filing, Schedule I must be amended too even if the Ohio total does not change.

The most common mistake is leaving statute references blank, which causes the agency to request supporting documentation. The misconception is that round-number entries are acceptable; cents are required.

Schedule II — Apportionment of Business Income

Schedule II reconciles total to apportioned business income, feeding Line 6. Show Ohio sales, total sales, and the resulting ratio carried to six decimals.

A PTE with Ohio sales of $2,000,000 and total sales of $5,000,000 shows ratio 0.400000.

Service-business sales source to the customer’s benefit location under ORC 5747.212, which can require a market-by-market study.

The most common mistake is sourcing services to where the work is performed instead of where the benefit is received. The misconception is that origin sourcing applies; Ohio is destination/benefit only.

Schedule III — Allocation of Nonbusiness Income

Schedule III allocates nonbusiness income (interest, dividends, capital gains on non-trade assets, rents from a single property) directly to Ohio or out-of-state.

Interest from an Ohio bank account that is not part of the trade or business allocates to Ohio in full.

Edge case: gain on the sale of partnership interest is generally nonbusiness under Corrigan v. Testa (Ohio 2016), but only if the seller is a non-unitary partner.

The most common mistake is allocating intangible income to Ohio merely because the entity is Ohio-based. The misconception is that nonbusiness income is always allocated to the commercial domicile; Ohio uses item-by-item rules.

Schedule IV — Apportionment Ratio Computation

Schedule IV is the worksheet that produces the Line 5 ratio. Enter Ohio sales (numerator) and total sales (denominator) only; payroll and property are not used.

A SaaS company with $3M of Ohio subscriber revenue and $12M total revenue enters 3,000,000 / 12,000,000 = 0.250000.

Edge case: if the entity has no sales (a holding company), Ohio uses gross income from intangible property as the proxy under OAC 5703-29-17.

The most common mistake is using gross receipts including non-sale items like loan principal repayments. The misconception is that the ratio can be borrowed from a related-entity return; each entity computes its own.

Schedule V — Credits Detail

Schedule V Part A lists nonrefundable credits feeding Line 9; Part B lists refundables feeding Line 13. Each credit requires the certificate number issued by the awarding agency.

A Job Creation Tax Credit of $5,000 references certificate JCTC-2025-0123 and statute ORC 122.17.

Edge case: certificated credits transferred from a related entity require Form CAT-CR attached.

The most common mistake is omitting the certificate number, which voids the credit at audit. The misconception is that a federal R&D credit qualifies; only Ohio-certificated credits qualify.

Schedule VI — Investor Information

Schedule VI is the most important schedule and the one most likely to delay a return. List every investor, resident or nonresident, with name, FEIN/SSN, address, residency status, ownership %, and inclusion on the composite (Yes/No).

Sarah Johnson, SSN 123-45-6789, Florida resident, 25% ownership, Composite: Yes.

Edge case: a tiered structure (partnership owning partnership) requires the upper-tier’s name and FEIN, not the ultimate beneficial owner.

The most common mistake is listing only the composite-included investors and omitting residents, which fails the agency’s reconciliation against federal Schedule K-1s. The misconception is that residents can be excluded; they must be listed even though they are not on the composite.

Three Filled-Out Examples Using Real Scenarios

Scenario 1: Maple Ridge Partners, LLC — 3-Member Service LLC With Mixed Residency

Maple Ridge Partners is a Columbus consulting LLC taxed as a partnership. It has three equal members: Sarah Johnson (Florida resident), Marcus Chen (Ohio resident), and Janet Patel (Michigan resident). 2025 federal ordinary income is $300,000, all Ohio-source.

Form Section	What Maple Ridge Enters
Header — Tax Year	01/01/2025 to 12/31/2025
Header — Entity Name and FEIN	MAPLE RIDGE PARTNERS LLC, 31-1234567
Line 1 — Federal Distributive Income	300,000
Line 2 — Add-Backs	0
Line 4 — Adjusted Qualifying Amount	300,000
Line 5 — Apportionment Ratio	1.000000 (100% Ohio)
Line 7 — Nonresident Composite Share	200,000 (Sarah + Janet, 66.67%)
Line 8 — Tax (3.0%)	6,000
Line 14 — Estimated Payments	6,000
Line 17 — Balance Due	0

Scenario 2: Buckeye Tech Holdings, S Corp — Multi-State With Nonresident Corporate Investor

Buckeye Tech is a Cleveland-based software S corporation with five shareholders: three Ohio residents and two nonresidents (Aisha Williams of Texas and Carlos Rivera of Illinois). 2025 federal ordinary income is $1,200,000 with $50,000 of bonus depreciation.

Form Section	What Buckeye Tech Enters
Header — Entity Type	S Corporation checked
Line 1 — Federal Distributive Income	1,200,000
Line 2 — Bonus Depreciation Add-Back (5/6)	41,667
Line 4 — Adjusted Qualifying Amount	1,241,667
Schedule IV — Ohio/Total Sales	6,000,000 / 15,000,000 = 0.400000
Line 6 — Apportioned Income	496,667
Line 7 — Composite Share (Aisha + Carlos, 40%)	198,667
Line 8 — Tax (3.0%)	5,960
Line 14 — Estimated Payments	5,000
Line 17 — Balance Due	960

Scenario 3: Lakefront Realty Partners — Real Estate LLC With Trust Investor

Lakefront Realty is a Cincinnati real estate LLC taxed as a partnership. It has four members: two individual nonresidents (Robert Kim of Kentucky, Diane Foster of Indiana), one Ohio resident, and the Foster Family Trust (Indiana). 2025 federal ordinary income is $400,000 with $100,000 of nonbusiness rental from a single Cleveland building.

Form Section	What Lakefront Enters
Header — Entity Type	LLC checked
Line 1 — Federal Distributive Income	400,000
Schedule III — Allocated Nonbusiness Rent (Ohio)	100,000
Line 4 — Adjusted Qualifying Amount (business only)	300,000
Schedule IV — Apportionment Ratio	0.750000
Line 6 — Apportioned Business Income	225,000 + 100,000 allocated = 325,000
Line 7 — Composite Share (75%, three nonresidents)	243,750
Line 8 — Tax (individuals 3.0%, trust 2.75%)	Individual $4,875 + Trust $2,234 = 7,109
Line 14 — Estimated Payments	7,000
Line 17 — Balance Due	109

How to File the Completed Form IT-4708

Ohio mandates electronic filing for IT-4708 under OAC 5703-7-19. Three filing channels exist, and each has different mechanics.

Ohio Business Gateway (OBG). Log in to the Ohio Business Gateway and select Pass-Through Entity Tax under the Taxation service. Upload the IT-4708 PDF or enter line-by-line. Pay by ACH debit (free), ACH credit (free, sender pays bank fees), or credit card (2.5% surcharge through ACI Payments). Processing time is 5–10 business days; the OBG confirmation number is your proof of filing.

Approved tax software (MeF). Drake, CCH Axcess, Lacerte, ProSeries, UltraTax, and TaxAct Business all transmit IT-4708 directly to Ohio’s MeF gateway. The software returns an Accepted acknowledgment within 24–48 hours; print and retain it. Payment is bundled in the e-file payload via ACH debit.

Paper filing under hardship waiver. File Form IT-WAIVER at least 30 days before the due date. If approved, mail the IT-4708 with payment voucher IT-4708-V and a check made payable to Ohio Treasurer of State to: Ohio Department of Taxation, P.O. Box 181140, Columbus, OH 43218-1140. Use certified mail with return receipt; processing time is 8–12 weeks.

The 2025 IT-4708 is due April 15, 2026 for calendar-year filers. A federal extension extends Ohio to October 15, 2026 but does not extend the time to pay. Estimated tax payments are due quarterly on April 15, June 15, September 15, and January 15.

What Happens After You File the IT-4708

Within 24–48 hours of MeF transmission (or 7–10 days for OBG), the Ohio Department of Taxation issues an acknowledgment. Accepted means the schema validated and the return entered processing; it does not mean the math has been audited.

Processing audits run 60–90 days. The agency cross-matches the IT-4708 against (1) federal Form 1065 or 1120-S filed with the IRS, (2) IT K-1s issued to investors, and (3) prior-year IT-4708. Any mismatch triggers a Billing Notice mailed to the entity address.

Refunds (Line 20) take 8–12 weeks for paper and 4–6 weeks for e-file. Interest on refunds accrues only after 90 days from filing under ORC 5747.11.

If the agency proposes an adjustment, the entity has 60 days to file a Petition for Reassessment under ORC 5717.02. Missing the 60-day window forfeits all appeal rights.

Mistakes to Avoid When Filling Out Form IT-4708

• Filing IT-4708 when IT-1140 was the better choice. Once the election is made, it locks for the year and the entity cannot retroactively switch even if it costs more tax.
• Including resident investors on the composite. Residents must file their own IT 1040, and including them double-taxes their share.
• Using the wrong tax rate (last year’s 3.5% instead of 3.0%). Causes overpayment that must be refunded with delay.
• Forgetting the bonus depreciation add-back on Schedule II. The single most-audited line; mismatches generate automatic billing notices.
• Sourcing service revenue to the work-performed location. Ohio uses benefit-received sourcing; misapplied formula understates Ohio sales.
• Omitting the Schedule VI listing of Ohio-resident investors. All investors must be listed even if not on the composite.
• Mailing a check over $10,000. Triggers automatic 5% EFT-mandate penalty.
• Missing quarterly estimates. Generates Line 11 underpayment interest at 8% for 2026.
• Failing to attach the federal Form 7004 extension. Voids Ohio extension and runs late-file penalty.
• Using the registered-agent address instead of principal office. Causes agency mail to return undeliverable.
• Allocating refundable IT-4738 credit to investor IT K-1s. Creates double-claiming and triggers an audit.
• Treating gain on sale of partnership interest as business income. Often nonbusiness under Corrigan v. Testa and must be allocated, not apportioned.

Each mistake above produces either a billing notice, a delayed refund, or both. The compounding effect of two mistakes on the same return often pushes a routine filing into a multi-cycle correction process.

Do’s and Don’ts

• Do confirm the form revision date is Rev. 10/25 before filing, because schema mismatch causes immediate rejection.
• Do complete Schedule VI first, because per-investor totals roll up into Lines 7 and 8.
• Do pay electronically through OBG even for amounts under $10,000, because the confirmation number is the cleanest proof of payment.
• Do retain the MeF acknowledgment PDF for at least 7 years, because the Ohio statute of limitations runs from filing.
• Do issue IT K-1s to every investor by the due date of the return, because investors need them for their own filings.
• Do match Schedule II add-backs to the federal return line items, because the agency cross-references each one.
• Don’t check Final Return unless the entity is dissolving, because the box closes the Ohio account and forces reapplication.
• Don’t apply overpayment forward on a final return, because the credit becomes unrecoverable.
• Don’t mix IT-4708 and IT-1140 estimates, because once designated they cannot be reassigned.
• Don’t rely on the federal extension without checking the Ohio extension box, because Ohio requires affirmative election.
• Don’t ignore tier-up IT K-1 withholding on Line 15, because that is often the largest payment credit on the return.
• Don’t round to whole dollars on Schedule IV, because six-decimal precision is required.

Pros and Cons of IT-4708 vs. Filing With Help

Pros of IT-4708 (composite return):

• One filing instead of multiple nonresident IT 1040s simplifies investor relations.
• Investors avoid Ohio individual-return filing if IT-4708 is their only Ohio source.
• Estimates are made by the entity, not each investor, which centralizes cash management.
• The flat 3.0% rate often beats the graduated individual rate for high-income investors.
• Tier-up credits flow directly without investor-level coordination.

Cons of IT-4708:

• Investors lose the ability to claim Ohio personal exemptions and deductions.
• The composite tax cannot be reduced by investor-level itemized deductions or losses.
• Resident investors cannot participate, splitting filing logistics.
• Once elected, the choice locks for the year even if facts change.
• The federal SALT-cap workaround benefit goes to IT-4738, not IT-4708.

Pros of filing with a CPA:

• Avoids the 18% paper-rejection rate for self-prepared returns.
• Catches the bonus depreciation add-back that 30% of self-filers miss.
• Optimizes between IT-4708, IT-1140, and IT-4738 each year.
• Coordinates IT K-1 issuance with investor returns.
• Manages the 60-day petition window if the agency proposes adjustments.

Cons of filing with a CPA:

• Costs $800–$2,500 for a typical small-PTE filing.
• Adds 1–2 weeks to the timeline for review cycles.

IT-4708 vs. IT-1140 vs. IT-4738 — Which Pass-Through Return to File

Ohio offers three pass-through filings, and each treats investors differently. Choosing the wrong one can cost real money, especially after the federal SALT cap.

Feature	IT-4708 / IT-1140 / IT-4738
Type	IT-4708: Composite income return / IT-1140: Withholding return / IT-4738: Elective entity-level tax
Who is included	IT-4708: Qualifying nonresidents only / IT-1140: Qualifying nonresidents only / IT-4738: All investors (resident + nonresident)
Tax rate (2025)	IT-4708: 3.0% / IT-1140: 5.0% / IT-4738: 3.0%
Federal SALT-cap workaround	IT-4708: No / IT-1140: No / IT-4738: Yes
Investor must file Ohio IT 1040	IT-4708: No (if only Ohio source) / IT-1140: Yes / IT-4738: No (full credit)
Election locks for the year	All three: Yes

FAQs

Is Form IT-4708 mandatory for every pass-through entity?

No. A PTE may instead file IT-1140 or the elective IT-4738. The IT-4708 election is annual and investor-by-investor under ORC 5747.08(IV).

Can I include Ohio-resident investors on the composite return?

No. Only qualifying nonresident investors can be composited; residents must file their own IT 1040 and report their share via IT K-1.

Do I write the entity’s legal name or DBA in the header?

Yes, use the legal name as filed with the Ohio Secretary of State and on the federal 1065 or 1120-S; never use a DBA.

What date format does Ohio require for the tax year line?

Yes, MM/DD/YYYY is required, and short-year filings need actual short-year dates with the appropriate box checked.

Does a federal Form 7004 extension automatically extend Ohio?

Yes, but only if the Federal Extension box is checked and a copy of the Form 7004 is attached to the IT-4708.

Can I file IT-4708 on paper?

No, except under an approved hardship waiver via Form IT-WAIVER. Ohio requires e-filing under OAC 5703-7-19.

What is the tax rate on IT-4708 for 2025?

Yes, the rate is 3.0% for individual investors and 2.75% for trust investors, dropped from 3.5% under House Bill 33.

Do I list resident investors on Schedule VI?

Yes, all investors must be listed with residency status and a Yes/No flag for composite inclusion; omitting residents causes K-1 reconciliation failure.

Can a single-member LLC file IT-4708?

No. IT-4708 requires two or more qualifying investors. A single-member LLC is disregarded and reports on the owner’s return.

Where do I report Ohio withholding from an upper-tier PTE?

Yes, on Line 15 (Withholding and Other Payments), using the IT K-1 issued by the upper-tier entity as support.

Is the IT-4708 the same as the IT-4738 elective PTE return?

No. IT-4738 is an elective entity-level tax that captures all investors and provides a federal SALT-cap workaround; IT-4708 is a composite for nonresidents only.

Can I amend the IT-4708 if I included the wrong investor?

Yes, file an amended IT-4708 with the Amended Return box checked and a one-page narrative within four years of the original due date.

Do I have to make quarterly estimated payments?

Yes, if prior-year tax exceeded $500. Estimates are due April 15, June 15, September 15, and January 15 on Form IT-4708ES.

What happens if I miss the April 15 filing deadline?

No automatic extension exists without Form 7004; late filing triggers a penalty of the greater of $50/month (max $500) or 5%/month (max 50%) of unpaid tax.