Ohio decreases personal income tax rate; amends business deduction
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Tuesday, July 30, 2019

Ohio decreases personal income tax rate; amends business deduction

By Payroll and Entitlements Editorial Staff

Ohio has enacted legislation that reduces personal income tax rates by 4%; increases the personal exemption; and amends the business deduction.

Personal income tax rates. The personal income tax rate is not imposed on amounts under $21,750 (previously $10,500).

The lowered rates for 2019 on income are:

  • $21,750 but under $43,450, $310.47 plus 2.850% of the amount over $21,750;
  • $43,450 but under $86,900, $928.92, plus 3.326% of the amount over $43,450;
  • $86,900 but under $108,700, $2,374.07, plus 3.802% of the amount over $86,900;
  • $108,700 but under 217,400, $3,202.91 plus 4.413% of the amount over $108,700;
  • $217,400, $7,999.84 plus 4.797% of the amount over $217,400.

The tax on estates is now levied at a rate of 1.42744% (previously .7425%) of the first $21,750 (previously $10,500).

Personal exemption. The personal exemption is increased from:

  • $2,200 to $2,350 on income under $40,000;
  • $1,950 to $2,100 on income over $40,000 but under $80,000; and
  • $1,700 to $1,850 on income over $80,000.

Business deduction. The deduction for business income is amended to state it is for "eligible" business income. The definition of eligible business income excludes income from legal services or lobbying. (H.B. 166, Laws 2019, effective July 18, 2019.)

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