Allow state income tax deduction for overtime wages
Legislative Analysis Report Allow state income tax deduction for overtime wages
1. Primary Purpose of the Bill
This bill intends to allow Ohio taxpayers to deduct their overtime wages from their state income taxes, thereby reducing their overall state income tax liability.
TaxationLabor and Employment
2. Changes to Existing Law
ORC Sec. 5747.01 Creates a state income tax deduction for overtime wages earned under state or federal law. This deduction is available for the first tax year ending after the bill's effective date and for the next seven tax years. It also updates the definition of modified adjusted gross income to include this new deduction.
3. Key Information for Citizens
🗳️ What You Need to Know
- Ohio taxpayers who earn overtime pay can deduct those wages from their state income taxes.
- The tax deduction is temporary, lasting for a total of eight tax years starting with the first tax year that ends after the law goes into effect.
- To qualify for the deduction, the overtime wages must be paid in accordance with Ohio or federal overtime laws.
4. Entities Affected
- Ohio employees who earn overtime wages
- Employers who pay and track overtime wages
- The Ohio Department of Taxation
5. Regulatory Impact & Enforcement
Agency Authority: The Ohio Department of Taxation is responsible for administering the new tax deduction on state income tax forms.
Penalties & Mandates: Not applicable
Implementation Timeline: The deduction applies to taxable years ending on or after the effective date of the bill, and remains in effect for that first year and the following seven taxable years.
6. Estimated Fiscal Impact
State Revenue Impact
Not applicable
Local Government Impact
Not applicable
Implementation Costs
Not applicable
Net Annual Fiscal Effect
Not applicable
Policy doesn’t happen in a vacuum. Meet the representatives and senators who introduced this bill and are pushing it through the chamber. Click on any sponsor to see their district, party affiliation, and what other legislation they’ve championed this session.
Primary Sponsors
Tex Fischer
District
59
Chamber
House of Representatives
Party
Republican
Nick Santucci
District
64
Chamber
House of Representatives
Party
Republican
Co-Sponsors
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Status Changes
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Governor |
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Referred to committee
Feb 05 2025
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Documents
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