Key takeaways
- Ohio has no separate S corp income return. The entity-level state filing is the CAT.
- For calendar year 2026 the CAT exclusion is $6 million under R.C. 5751.01(R).
- The Q4 2026 CAT return and payment are due February 10, 2027.
- A consolidated elected group takes one exclusion, and its members do not drop out individually at $150,000.
The direct answer
Ohio does not require a separate income tax return for an S corporation. The business's state filing is the commercial activity tax under R.C. Chapter 5751, which applies to gross receipts sitused to Ohio. Two other state items apply only in some years: the pass-through entity election under R.C. 5747.38 and nonresident owner withholding under R.C. 5747.41. The federal Form 1120-S goes to the IRS separately.
Decision rule: if 2026 Ohio taxable gross receipts exceed $6 million, the client owes CAT on the excess and files quarterly. At or below $6 million the tax is zero, but the registration question stays open. If the client has nonresident owners and no 2026 election, check withholding.
Who files CAT and at what exclusion
The base is taxable gross receipts, which R.C. 5751.01(G) defines as receipts sitused to Ohio under R.C. 5751.033. The CAT is an annual privilege tax on the calendar year (R.C. 5751.02), and R.C. 5751.05(A) requires quarterly filing.
R.C. 5751.01(R) sets the exclusion at $3 million beginning in 2024 and $6 million beginning in 2025, so the 2026 figure is $6 million. Ohio Administrative Code 5703-29-21(A)(2) says the annual minimum tax has been eliminated for tax periods beginning January 1, 2024.
The $150,000 excluded-person test in R.C. 5751.01(E)(1) does not apply to a member of a consolidated elected taxpayer. The statute does not say whether a standalone client under $150,000 must still register or file a zero return. Ask the Department before closing that file, and note the answer on the client record.
The rate and worked examples
R.C. 5751.03 sets the rate at two and six-tenths mills per dollar, or 0.26%, applied after subtracting the calendar-year exclusion.
Annual example: $8,500,000 of 2026 Ohio receipts less $6,000,000 leaves $2,500,000, and 0.26% of that is $6,500. Using the superseded $3 million figure gives $14,300, which overstates the tax by $7,800.
Quarterly example: receipts of $1,200,000 in Q1, $2,000,000 in Q2, $2,500,000 in Q3 and $2,300,000 in Q4 total $8,000,000. R.C. 5751.03 applies the full $6,000,000 exclusion to the first quarterly return and carries unused amounts forward within the year. Q1 absorbs $1,200,000 and carries $4,800,000. Q2 absorbs $2,000,000 and carries $2,800,000. Q3 absorbs $2,500,000 and carries $300,000. Q4 absorbs $300,000 and leaves $2,000,000 taxable. The annual tax is $5,200.
Quarterly due dates, estimates and reconciliation
Under Ohio Administrative Code 5703-29-09, returns and estimated payments are due by the tenth day of the second month after each quarter: August 10, 2026 for Q2, November 10, 2026 for Q3 and February 10, 2027 for Q4. Q1 is May 11, 2026, not May 10. May 10, 2026 was a Sunday, and R.C. 1.14 moves a deadline on a Sunday to the next day that is neither a Sunday nor a legal holiday. The rule has no weekend language of its own, so cite R.C. 1.14 on the workpaper.
Each quarter's estimate must be at least 95% of the prior quarter's taxable gross receipts, and the estimated payment cannot be less than 70% of that quarter's actual liability. Decision rule: when receipts are rising, estimate from the expected quarter, not the prior one.
Under OAC 5703-29-09(B)(1)(c), reconcile on or before the due date of the following quarter's return. A low Q1 2026 estimate is reconciled on the Q2 return due August 10, 2026.
Documents to collect for CAT
Ask for a calendar 2026 sales ledger with one line per invoice: invoice date, customer, ship-to or service location and gross amount. Record the location on each line so the R.C. 5751.033 situs test runs on the ledger. Also request each quarter's bank deposit reconciliation, refunds and allowances by customer, last quarter's CAT return with its confirmation, and the membership list with ownership percentages for any consolidated group. The Department requires CAT to be filed and paid electronically through the Ohio Business Gateway.
Use this wording with the client: "Please send your calendar 2026 sales ledger, with one line per invoice showing the invoice date, customer, ship-to or service location and gross amount, and your bank deposit reconciliation for each quarter, so we can prepare your 2026 Ohio commercial activity tax returns." Log the reply in the file the same day.
Consolidated groups and the one-taxpayer rule
R.C. 5751.011(A) lets two or more persons elect to be a consolidated elected taxpayer, using ownership tests of at least 80% or at least 50%. R.C. 5751.01(D) treats the group as one taxpayer, and R.C. 5751.011(C)(1)(a) requires members to exclude gross receipts among themselves.
Example: Parent Holdings elects with Sub A and Sub B. Sub A sells $2,400,000 to Sub B, and that amount is excluded. Outside Ohio receipts are $4,100,000 for Sub A and $3,700,000 for Sub B, a $7,800,000 base. Less one $6,000,000 exclusion leaves $1,800,000, and the group CAT is $4,680.
Failure: each member is run separately with its own $6 million exclusion. Two exclusions shelter $12 million, so the group shows zero tax and misses the $4,680. Fix: aggregate the group and apply one exclusion.
Pass-through entity election and nonresident withholding
Under R.C. 5747.38(C), a pass-through entity that is not a disregarded entity may elect entity-level tax for a taxable year. The election applies only to that year, is irrevocable for it, and is due on or before the return deadline under R.C. 5747.42. It is made on the form the Tax Commissioner prescribes. The Department's 2025 instructions for Form IT 4738 carry the title Electing Pass-Through Entity Composite Income Tax Return, so confirm the 2026 version before filing.
The electing rate for taxable years beginning in 2023 and later is the rate on taxable business income under R.C. 5747.02(A)(4)(a), as R.C. 5747.38(B)(2) provides. Pull the 2026 rate from the current section before quoting it.
Nonresident withholding under R.C. 5747.41 applies only when adjusted qualifying amounts exceed $1,000 for the year, and not to an entity that elects for that year. Decision rule: if the S corp has nonresident owners and no 2026 election, collect each owner's address and share of Ohio-source income before preparing the withholding return. The withholding form's number is not stated in the sections checked, so take it from the Department's pass-through page.
The owner-level Ohio return
Absent an election, Ohio income tax on the S corp's income falls on the owners. R.C. 5747.01(B) defines business income as income arising in the regular course of a trade or business, and R.C. 5747.01(A)(28) provides the business income deduction. The forms that carry K-1 amounts onto the owner's Ohio individual return are not confirmed on this page, so take them from the 2026 Ohio individual instructions.
Federal dates that still drive the file
IRS instructions for Form 1120-S say the return is generally due by the 15th day of the third month after the tax year ends, which for 2026 is March 15, 2027. The same instructions say Form 7004 is generally due by the regular due date of the return, and the IRS describes Form 7004 as an automatic 6-month extension.
A federal extension does not move the Ohio CAT dates. The rule text checked has no extension provision for the quarterly return, so the Q4 2026 return and payment stay due February 10, 2027.
Failure modes and the fix
Failure: the preparer uses an older guide's $3 million figure for 2026. Fix: use $6 million under R.C. 5751.01(R) and cite it on the workpaper.
Failure: the Q1 return shows no tax and is treated as an error. Fix: the exclusion absorbed the receipts, and the balance carries forward within the year under R.C. 5751.03.