Legal Resources

Tax Reform Frequently Asked Questions

What is changing?

  • For taxable years 2013 and forward, individual taxpayers owning businesses organized as sole proprietorships or pass-through entities (PTEs) can take advantage of the new “50% small business investor income deduction.”  These entities could include partnerships, subchapter S corporations, and limited liability companies (LLCs).  The deduction amounts to 50% of up to $250,000 of the taxpayer’s Ohio-sourced business income. For individuals with a filing status of married filing joint or single, $250,000 is the maximum income subject to the deduction. For individuals with a filing status of married filing separately, $125,000 is the maximum income subject to deduction.  In either case, the maximum income subject to deduction cannot exceed the taxpayer’s OAGI as if calculated prior to taking the deduction.  The deduction is only available to individuals on the OH form IT1040.