Is Ohio getting rid of income tax?

Ohio is currently in the process of phasing out its state income tax specifically on nonbusiness income, with a full repeal targeted for 2030. This initiative does not apply to business income.

Ohio's Income Tax Reform: Focus on Nonbusiness Income

Ohio is implementing significant changes to its state income tax system, specifically targeting the tax on nonbusiness income. This reform is not a complete elimination of all state income taxes, as Ohio continues to levy taxes on business income.

Understanding the Phase-Out

The state income tax on nonbusiness income is being gradually eliminated over a period of six years. This structured approach, known as a phase-out, means that the tax burden on nonbusiness income will progressively decrease each year until its complete repeal.

• Target for Full Repeal: The goal is to achieve full repeal of the state income tax on nonbusiness income by 2030. This makes Ohio one of the states moving towards a more streamlined individual income tax structure.
• What is Covered: This change primarily impacts income derived from nonbusiness sources, such as wages, salaries, and investment income for individuals.
• What is Not Covered: It is important to note that under current law, Ohio also levies a tax on business income. The proposed phase-out and repeal specifically address nonbusiness income and do not currently extend to the state's tax on business income.

Implications for Ohio Taxpayers

This legislative move aims to reduce the tax burden on individual taxpayers and potentially make Ohio more attractive for residents and businesses.

Staying Informed About Ohio Tax Law

For the most up-to-date information on Ohio's tax laws and legislative changes, individuals and businesses should regularly consult official state resources. The Ohio Legislature's website is a primary source for legislative updates and bill analyses.