In late June, Governor Kasich approved House Bill 483 that includes additional tax reductions to build on tax cuts already enacted in previous years. These cuts, emerging from the governor’s Mid-Biennium Review, were possible because of Ohio’s improving economy which is generating stronger than expected state revenue. Those revenues, along with greater efficiencies enacted to manage state government, provided the opportunity for more tax relief that includes:
- Accelerating the Income Tax Cut: Next year’s scheduled one percent cut in income tax rates is moving up to be effective retroactive to January 1, 2014, and shortly after July 1, 2014, income tax withholding rates will be reduced. These changes will give taxpayers the full 10 percent income tax cut that was not set to begin until January 2015.
- Additional Small Business Tax Cuts: For tax year 2014, the personal income tax deduction on small business income will be increased to 75 percent, freeing up additional funds for private sector job creators to further invest in growing their businesses.
- New Tax Relief for Low- and Middle-Income Ohioans: Ohio is doubling the EITC from 5 to 10 percent of the federal credit. In addition, the state is increasing the personal exemption for Ohioans earning less than $40,000 a year from $1,700 to $2,200, and for those with incomes between $40,000 and $80,000 a year from $1,700 to $1,950.
To discuss how these changes impact you, please feel free to contact our office at (513) 483-6699.