On June 30th, Governor Kasich signed the budget bill for the 2018-2019 fiscal year. In addition to retaining the Business Income Deduction of 100% of business income up to $250,000 and subsequent tax rate of 3% on excess business income, the bill includes the following provisions:
Reduces the number of tax brackets from 9 to 7, eliminating the lowest two brackets.
Increases the college savings deduction from $2,000 annually per beneficiary to $4,000 – starting in tax year 2018.
Implements a tax amnesty program from January 1st of 2018 to February 15, 2018 for most state taxes due as of May 1, 2017. The commissioner will waive all applicable penalties and half of the interest due on the liabilities. Eligible tax liabilities include: CAT, state income tax, state and local sales and use tax and school district taxes, as well as financial institutions tax, alcohol and tobacco, cigarette and excise taxes.
In addition to the above, the Bill also made some revisions to municipal income tax. These include the following:
For tax years beginning in 2018, it allows fourth quarter municipal individual estimated income tax payments to be made by January 15th rather than be required to be paid by December 15th.
Requires the Ohio Department of Revenue to study the feasibility of filing municipal income tax returns electronically and issue a report no later than January 1, 2018.
Provides for an optional election for businesses to file a single municipal filing through the Ohio Business Gateway (“OBG”). This single filing would report and pay all the tax due to all the municipalities in which the business earned profits. The election would renew automatically year to year unless revoked. More details about this to follow as they are released.
If you would like to discuss your situation or have questions about how these changes will affect your business or individual income tax filings, please contact our professionals at 859-331-1717.
