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Ohio Income Tax Updates
January 29, 2020
 A filing season approaches, we are often focused on the federal changes to tax law, but one shouldn’t fail to keep their eyes and ears open to the state changes. For those of us in Ohio, the 2019 tax law changes were fairly mild. Below are a few of the key changes to Ohio tax law for the 2019 tax year.
Change in Tax Brackets:
Following the example of the Federal government, Ohio has decreased the number of tax brackets and overall tax rates which are applicable to the 2019 tax year. The change in rates are displayed below:
For taxable years beginning in 2018:
Ohio Taxable Income Tax Calculation
$0 - $10,850.........................0.000%
$10,851 - $16,300.................$80.56 + 1.98% of excess over $10,851
$16,300 - $21,750.................$188.47 + 2.476% of excess over $16,300
$21,750 - $43,450................$323.41 + 2.969% of excess over $21,750
$43,450 - $86,900...............$967.68 + 3.465% of excess over $43,450
$86,900 - $108,700.............$2,473.22 + 3.960% of excess over $86,900
$108,700 - $217,400............$3,336.50 + 4.597% of excess over $108,700
More than $217,400.............$8,333.44 + 4.997% of excess over $217,400
For taxable years beginning in 2019:
Ohio Taxable Income Tax Calculation
0 - $21,750.............................0.000%
$21,751 - $43,450.................$310.47 + 2.850% of excess over $21,750
$43,450 - $86,900...............$928.92 + 3.326% of excess over $43,450
$86,900 - $108,700.............$2,374.07 + 3.802% of excess over $86,900
$108,700 - $217,400............$3,202.91 + 4.413% of excess over $108,700
More than $217,400.............$7,999.84 + 4.797% of excess over $217,400
Ohio Earned Income Credit:
The Ohio Earned Income Credit (EIC) was also expanded and simplified for 2019. Historically, the credit was calculated utilizing 10% of the Federal EIC, and possibly subject to limitations based on income. For the 2019 tax year, the credit is simply 30% of the Federal EIC.
Modified Adjusted Gross Income (MAGI):
The 2019 tax law introduces a new term for purposes of means testing. Means testing is applied to determine exemption amounts and qualifications for certain credits. Historically, Ohio Adjusted Gross Income (OAGI) was used in means testing. The primary difference with this new metric is that income which would have been excluded under Ohio’s generous Business Income Deduction is now included for means testing. Note, that this doesn’t mean that the business income is now taxable. It simply means that this income will be considered when determining exemptions and credit qualifications.
In the ever-changing world of taxes, the changes take place not only on the Federal level, but on the state, and even local as well. We strive to stay abreast of these changes, and help you make the best tax-conscious decisions.
Thank you for all of your questions, comments and suggestions for future topics. As always, they are much appreciated. We also welcome and appreciate anyone who wishes to write a Tax Tip of the Week for our consideration. We may be reached in our Dayton office at 937-436-3133 or in our Xenia office at 937-372-3504. Or, visit our website.
This week’s author – Josh Campbell
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