Tax News Update    Email this document    Print this document  

August 7, 2023
2023-1372

Ohio law reduces personal income tax rates retroactive to January 1, 2023

On July 3, 2023, Governor Mike DeWine signed HB 33, which retroactive to January 1, 2023, gradually reduces the Ohio personal income tax rates over two years, collapsing the current four tax brackets to two by 2024. As under current law, those with Ohio annual taxable income of less than $26,050 are exempt from Ohio personal income tax. (For information concerning other tax changes under H.B. 33, see Tax Alert 2023-1218.)

Ohio personal income tax rates for 2023

Ohio taxable income

Marginal tax rate

$26,050 to $92,150

2.75%

$92,151 to $115,300

3.688%

More than $115,300

3.75%

Ohio personal income tax rates for 2024

Ohio taxable income

Marginal tax rate

$26,050 to $92,150

2.75%

More than $92,150

3.5%

Supplemental rate of withholding

The supplemental rate of withholding for bonuses and irregular wage payments is set by law at 3.5%. (Ohio Administrative Code 5703-7-10, rev. 11-23-2018.)

Ernst & Young LLP insights

This is the second time since 2021 that the Ohio legislature has retroactively lowered its personal income tax rates. H.B. 110, enacted on July 1, 2021, and effective January 1, 2021, reduced Ohio's individual income tax rates by 3%, eliminated the top income tax bracket for Ohio adjusted gross income (AGI) over $217,000, and reduced the tax rate for Ohio AGI over $110,650 to 3.99%.

The revised 2021 withholding tables were effective with wages paid on and after September 1, 2021. (See Tax Alert 2021-1322.)

The revised 2023 income tax withholding tables, once published, will be available here.

———————————————

Contact Information
For additional information concerning this Alert, please contact:
 
Workforce Tax Services - Employment Tax Advisory Services
   • Kristie Lowery (kristie.lowery@ey.com)
   • Kenneth Hausser (kenneth.hausser@ey.com)
   • Debera Salam (debera.salam@ey.com)

Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor

 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 1996 – 2024, Ernst & Young LLP

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

EY US Tax News Update Master Agreement | EY Privacy Statement