There has been some recent legislation that significantly changes Ohio income tax laws for the 2019 tax year. We’ve summarized the changes that impact most individuals.
All income tax rates have been reduced by 4%. The lowest three brackets are combined into one zero bracket. So taxpayers with taxable nonbusiness income of $21,750 or less will be in the zero tax bracket.
The Ohio earned income credit is now 30% of the federal earned income credit, if applicable.
The Campaign contribution credit is gone and the ability to check the box for the Ohio Political Party Fund has also been removed.
Ohio has introduced the concept of the Ohio modified adjusted gross income (MAGI). This is your Ohio adjusted gross income plus any business income deduction claimed on your return. This new MAGI (not the same as the federal MAGI) will be used to determine eligibility for various Ohio tax credits including joint filing credit, child and dependent care credit, retirement income and lump sum retirement credits, senior citizen and lump sum distribution credits and Ohio exemption credits.
These changes were part of House Bills 62 and 166. More information is available at www.tax.ohio.gov or by contacting our office.
Treasury Circular 230 Disclosure
Unless expressly stated otherwise, any federal tax advice contained in this communication is not intended or written to be used, and cannot be used or relied upon, for the purpose of avoiding penalties under the Internal Revenue Code, or for promoting, marketing, or recommending any transaction or matter addressed herein.