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Society testifies on elimination of marriage tax penalty

Written on Jun 23, 2023

The Ohio Society of CPAs on Tuesday testified in front of the Ohio House Ways & Means Committee in support of House Bill 199, which would eliminate the marriage tax penalty.  

Sponsored by Bill Dean, R-Xenia, and Tom Young, R-Washington Township, the 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. 

“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,” said OSCPA director of tax policy Greg Saul in his testimony.  

Saul said that the Society’s 2016 Tax Reform Task Force report emphasized the value in reducing the number of targeted tax deductions, credits and exemptions that are not achieving their intended purpose to make the tax system less cumbersome and more predictable. The report recommended fixing Ohio’s marriage tax penalty. 

Currently, married couples filing a joint Ohio income tax return may qualify for a tax credit. To qualify for this credit each spouse must have a qualifying Ohio adjusted gross income of at least $500 after adjustments. The Joint Filing Credit was created to offset the tax penalty created for married couples because of Ohio’s single tax rate table, but the process requires extra documentation and can create additional complexities for individuals. 

Saul noted neighboring states either allow multiple tax rate tables by filing status (i.e. West Virginia) or have a single tax rate (i.e. Kentucky, Indiana, Michigan, Pennsylvania) both of which mitigate the inequity of the marriage tax penalty. 

House Bill 33 Update: The Ohio House and Senate on Wednesday, as expected, each voted not to accept each other’s state budget bills, sending the matter to a six-member conference committee to hammer out a final bill to send to Gov. Mike DeWine. The hope is to reach a deal by the state’s June 30 fiscal deadline.  Check out our article from last week if you missed reading it. 

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