07/09/2021

Ohio Tax Update: Ohio 2022-2023 Biennial Budget Tax Reform

Insights from OSAE Strategic Partner Clark Schaefer Hackett

Governor Mike DeWine signed 2021 HB 110 (“law” or “law change”), Ohio’s 2022-2023 biennial budget with significant tax law changes, rate reductions, and municipal income tax reforms. Many of the changes are effective retroactive to Jan. 1, 2021 and other effective dates as noted below.

Individual Income Tax Law Changes

HB 110 reduces individual income tax rates for all brackets by 3 percent and eliminated the top individual income tax bracket (formerly 4.797 percent) for Ohio AGI over $217,000. The law changed the next highest income tax bracket for individuals with Ohio AGI over $110,650 to 3.99 percent (formerly 4.413 percent). The law also increased the lowest bracket to $25,000 (previously $21,750), meaning individuals with Ohio AGI under that threshold will not owe Ohio income tax. The rate reductions noted above are effective retroactively to Jan. 1, 2021.

Other notable changes in the law:

• Increasing the number of days required for resident individuals to report the resident credit to 90 days (formerly 60 days) for changes in their tax liability to another state or the District of Columbia.
• Deferral of the date by which individuals must have Ohio income tax withheld from their Ohio unemployment income to Jan. 1, 2023.
• Repealed the requirement to report the NAICS code for each business the individual takes the business income deduction on form IT-BUS on or after Jan. 1, 2021.

Please select this link to read the complete article from OSAE Strategic Partner Clark Schaefer Hackett.