As a result of stronger than expected tax revenue due to the improving economy, Ohio enacted several law changes that will provide tax relief to all Ohio taxpayers. Most of the tax cuts were targeted to provide relief to low- and middle-income families as well as small businesses.
- The Ohio Earned Income Tax Credit was doubled by increasing the benefit from 5% to 10% of the federal credit.
- The state income tax personal exemption will increase from $1,700 to $2,200 for families earning less than $40,000 per year.
- The state income tax personal exemption will increase from $1,700 to $2,200 for families earning less than $40,000 per year
- Last year, Ohio enacted a small business tax deduction that enabled small businesses to reduce their taxable income by 50% of the first $250,000 earned. For 2014, the deduction will temporarily increase to 75% of the first $250,000 of income.
- Ohio had a scheduled income tax reduction of 1% that was to take effect in 2015. This 1% reduction was accelerated to 2014. This final 1% reduction caps off a full 10% reduction that started in 2013. The original schedule for the reduction in income tax rates was 8.5% in 2013, 0.5% in 2014 and 1% in 2015.
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