OH HB334

Amends section 5733.40 of the Revised Code to clarify that wages and guaranteed payments paid by a professional employer organization (PEO) to an owner of a pass-through entity can be treated as business income for tax purposes.

Applies to situations where a pass-through entity owner holds at least a 20% direct or indirect interest in the entity's profits or capital and the entity is a client employer of a PEO.

Treats guaranteed payments and compensation paid by a PEO to such owners as a distributive share of income of the qualifying entity rather than wages subject to other tax treatment.

Intended as a clarification of existing law and applies retroactively to taxable years beginning on or after January 1, 2013.