Eric Dorenkott, CPA, MT is a director at the firm and the head of the tax department.
On July 18, 2019, Governor Mike DeWine signed into law the 2020-2021 Ohio budget (House Bill 166). The following blog outlines the issues that could affect you and/or your business this year and into the future:
Individuals (effective January 1, 2019 unless stated otherwise)
- Eliminated the bottom two income tax brackets, which results in individuals making less than $21,750 not paying Ohio income tax.
- Reduced remaining individual income tax brackets by 4%.
- While there was concern the business income deduction would be eliminated, it did survive. However, lawyers and lobbyists no longer qualify for the $250,000 business income deduction. Additionally, they no longer qualify for the preferential 3% income tax rate on income over $250,000.
- The above mentioned 3% preferential tax rate on business income over $250,000 is eliminated effective January 1, 2020 (still allowed for 2019).
- Ohio political contribution credit of up to $50 per person ($100 joint) has been eliminated.
- A $250 deduction for teachers who have out-of-pocket work related expenses is now allowed.
- Following in the footsteps of South Dakota v. Wayfair, Inc. ruling by the United States Supreme Court, out-of-state sellers will be considered to have nexus within Ohio if they have 200 or more transactions or $100,000 of sales within Ohio.
- Investments made into a qualified Opportunity Zone will qualify for a 10% Ohio credit. There are certain criteria to qualify for this credit, please contact Corrigan Krause to further discuss.