Ohio income tax to drop slightly next year

By MARC KOVAC

news@vindy.com

COLUMBUS

Ohioans will pay a little less in state income taxes next year, after state officials completed a first-of-its-kind adjustment for inflation.

The so-called indexing of individual tax tables marked the first time the Ohio Department of Taxation shifted the brackets for inflation, after a law change enacted by lawmakers eight years ago but postponed as part of a later tax-reform package.

Tax Commissioner Richard Levin said the indexing now will occur annually, using federal data released in July. As part of the first indexing, each of the state’s nine income-tax brackets were adjusted by 0.9 percent, with taxpayers saving a combined $25 million annually as a result.

Actual savings will vary depending on how much taxpayers earn. Ohioans with taxable incomes of $30,000 will pay about $4 less in taxes; those earning $60,000 will pay about $6 less; and filers with $250,000 in taxable income will save about $26, according to statistics compiled by the tax department.

The adjustment was implemented to prevent what Levin called “bracket creep.”

“The purpose of indexing is to prevent people from being pushed into a higher tax bracket when their paychecks are only keeping up with inflation,” Levin said.

Ohio joins about a dozen other states that make comparable inflationary changes to their tax tables.