2015, 2016 Ohio earned income tax credit EITC

The Ohio EITC is patterned after the federal EITC, which Republican President Gerald R. Ford signed into law in 1975. President Ronald Reagan expanded the federal EITC; he called it “the best anti-poverty, the best pro-family, the best job-creation measure to come out of Congress.” In 2013, the average amount gleaned by working but low-income taxpayers nationally because of the EITC was $2,300, the Internal Revenue Service reported.

 

What is the Ohio Earned Income Tax Credit?

So, for example, if an Ohioan is entitled to a $2,300 federal EITC, he or she might be entitled to a $230 Ohio EITC (that is, 10 percent of that person’s federal EITC).Taxpayers who qualify for the federal earned income credit (FEIC) may take an Ohio earned income credit equal to 5% of the taxpayer’s FEIC with limitations.

The Earned Income Tax Credit (EITC) and Volunteer Income Tax Assistance (VITA)

The Earned Income Tax Credit (EITC) and Volunteer Income Tax Assistance (VITA) Locations are two vital resources that are underutilized. The EITC when coupled with the use of a VITA location and financial literacy is a proven strategy to help low-income individuals raise themselves out of poverty

 

How much is the Ohio Earned Income Credit (EITC)?

10 percent of the federal credit, limited to 50 percent of liability for Ohio Taxable Income above $20,000. For taxable years beginning on or after Jan. 1, 2013, a nonbusiness, nonrefundable earned income credit is available for taxpayers who were eligible for the federal earned income tax credit (EITC) on their federal tax returns. The Ohio earned income credit is equal to 5% of the taxpayer’s EITC. However, if the taxpayer’s Ohio taxable income (Ohio adjusted gross income less exemptions) exceeds $20,000 on either an individual or joint tax return, then the credit is limited to 50% of the tax otherwise due after deducting all other credits that precede the credit except for the joint filing credit. See the worksheet on page 20.

 

Ohio EITC Update

In 2014, Gov. John Kasich’s budget bill included a proposal to increase the state’s EITC from 5 to 15 percent of the federal credit. In May, 2014, the Ohio Senate approved a budget bill, HB 483, that included doubling the state’s Earned Income Tax Credit (EITC) to 10 percent of the federal credit and the governor signed it into law on June 17.