House Bill 333 could end the marriage tax penalty

By Jessica Salerno, OSCPA content manager

A member of OSCPA’s State and Local Tax Committee spoke Tuesday in front of the House Ways and Means Committee in favor of a bill that would eliminate the marriage tax penalty, an issue that has frustrated both taxpayers and CPAs alike for decades.

Stephen_Palmer“This legislation would permit married taxpayers filing a joint state income tax return to claim an enhanced joint filer credit that would effectively allow the couple to reduce their tax liability to no more than they would owe on a combined basis from filing separately,” said Stephen Palmer, CPA, state and local tax manager at Plante Moran.

Reps. John Becker, R-Union Township, and David Leland, D-Columbus, introduced House Bill 333 last August to amend Revised Code section 5747.08 to allow married couples to elect to file either separate state tax returns or a joint state return, irrespective of their federal filing status. However, a substitute bill was accepted in March that instead requires the same filing status but the proposed credit would be the difference between the taxpayers’ tax liability when filing jointly, prior to calculating the credit, and their combined tax liabilities if they filed separately.

Fixing Ohio’s marriage tax penalty was listed as a recommendation in the OSCPA Tax Reform Task Force Report released in 2016. Palmer said he regularly hears frustrations from his staff and clients about the process of evaluating married couples for filing separately versus jointly.

“The Joint Filing Credit was created to offset the tax penalty for married couples as a result of Ohio’s single tax rate table, but usually does not fully cover the additional tax,” Palmer said. This enhanced credit would cover the areas where the Joint Filing Credit falls short.

You can read Palmer’s complete testimony here.

According to the Tax Foundation, Ohio is one of the few Midwestern states to still use the state marriage tax penalty. Our neighbors Michigan, Indiana, Pennsylvania, Kentucky and West Virginia do not have to deal with the added tax complication.

Questions? Concerns? Contact Government Relations.

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  1. Anna Capaldi | Jun 10, 2018

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