Income - Small Business Investor Deduction FAQs

Does net rental income reported on Schedule E qualify for the 50% deduction?

Yes, to the extent it is business income and not otherwise deducted or excluded in computing Ohio Adjusted Gross Income for the taxable year. Rental income that is received on a regular basis (ex: monthly) would be considered to be in the ordinary course of business.  

Examples:

  • Taxpayer lives at Muirfield Village in Dublin, Ohio and rents out their house for two weeks during the Memorial Golf Tournament.  Does this income qualify for the small business deduction?
    • No, temporarily renting your primary residence for a limited time frame is not considered to be in the ordinary course of business.
  • Taxpayer has one or more rental properties and receives rent on a regular, consistent basis.  Does the rental income qualify for the small business deduction?
    • Yes