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October 9, 2023
2023-1675

Ohio Department of Taxation issues revised withholding tables effective November 1, 2023

The Ohio Department of Taxation (Department) has issued updated percentage method, optional computer method and withholding tables for use with wages paid on and after November 1, 2023. The updates reflect legislation enacted this year that lowered personal income tax rates retroactive to January 1, 2023. (See Tax Alert 2023-1372.)

Background

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.)

Supplemental withholding rate

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%.

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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

 

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