There have been several recent changes to Ohio’s operating budget for the biennium ending June 30, 2025. These changes encom通过 various tax provisions that may significantly impact your financial landscape. As your trusted 意图 advisors, we aim to keep you informed and prep是d for these modifications. Let’s dive into the most impactful tax changes:
Individual Income Tax: A Simplified Approach
Ohio is taking strides toward simplifying its individual income tax system. Starting from tax year 2024, the number of tax brackets for nonbusiness income will be streamlined from four to three. This phase-in process is set to continue, reducing the brackets further to just two. This change aims to make the tax filing process smoother and more straightforward for individuals.
Correction of Defective Resident Credit for Other 状态 Pass-Through Entity Elections
In a significant move to rectify a long-standing issue, Ohio has fixed a problem that previously burdened most resident owners. 在此之前, participating in other states’ 直通 entity (PTE) elections led to double taxation for Ohio resident owners, leading most to abandon these opportunities. However, the budget bill now allows Ohio residents credit for taxes paid to other states when 利用 通过 through entity elections, allowing for new 节税 planning opportunities.
Municipal Income Taxes for Employers with Remote Workforce
As the workforce landscape continues to evolve, Ohio is adapting its tax rules to accommodate remote working arrangements. For tax years ending after December 31, 2023, businesses can now use a modified apportionment formula to calculate net profits, accounting for the activities of remote employees. This means companies can attribute the 财产 and payroll of remote workers to the reporting office, not the employee’s home location. This means that employers can fulfill their employee withholding requirements while avoiding having to pay entity income tax to the municipality, so long they have no sales, 财产, or payroll in the jurisdiction aside from the remote worker.
Commercial Activity Taxes (CAT) Exclusion
Certain businesses will 好处 from an increased exclusion threshold under the new bill. For tax years 2024 and 2025, the first $3 million and $6 million, respectively, will be excluded from the CAT calculation. These excluded amounts will not be subject to the 0.26 百分比 猫率. Taxpayers will still need to file $0 returns to claim the exclusion. Additionally, the annual filing method has been eliminated so all taxpayers that 是 required to file will now have a quarterly filing requirement.
Sports Gaming Tax: Rate Increase
For those involved in the sports gaming industry, please be aw是 that the state sports gaming receipts tax rate has increased from 10 百分比 to 20 百分比 since July 1, 2023. Take this adjustment into account when planning and managing your sports gaming activities.
Ohio’s new budget bill brings both challenges and opportunities for taxpayers. We 是 here to help you navigate through these changes smoothly. We encourage you to reach out to us with any questions or concerns you may have about how these 税收的更新 may affect your financial strategies.
在意图, we pride ourselves on staying ahead of the curve and providing you with the expertise and support you need to thrive in an ever-changing tax landscape. Rest assured that we 是 committed to helping you make informed decisions that will lead to a brighter financial future.
By 约瑟夫Popp来说 (都柏林 Office)