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Society speaks in favor of eliminating marriage tax penalty

Written on May 1, 2020

OSCPA staff report

OSCPA SALT Committee member Stephen Palmer, CPA, this week testified in favor of a bill that would permit married taxpayers filing jointly to claim a credit that would reduce their tax liability to no more than what they would owe filing separately.

Palmer, state and local tax senior manager at Plante Moran, testified before the Ohio Senate Finance Committee in favor of Senate Bill 210. He referenced the Society’s 2016 Tax Reform Task Force report (PDF), which recommended fixing Ohio’s marriage tax penalty.

“Currently, married couples filing a joint Ohio income tax return may qualify for a tax credit,” said Palmer a member of OSCPA’s State and Local Tax (SALT) Committee. “To qualify for this credit each spouse must have qualifying Ohio adjusted gross income of at least $500 after adjustments. Qualifying Ohio adjusted gross income does not include social security, interest, dividends, capital gains, rents, royalties and other passive income. The credit is limited to a maximum of $650, an amount that has not been adjusted since 1989.”

He noted that neighboring states either allow multiple tax rate tables by filing status or have a single tax rate, “both of which mitigate the inequity of the marriage tax penalty.”

The Joint Filing Credit was created to offset the tax penalty created for married couples by Ohio’s single tax rate, but it usually does not fully cover the additional tax due caused by a joint return. Additionally, the credit can require additional documentation and complexity for individuals.

You can read Palmer’s testimony in its entirety here. For questions, more information, or to get involved yourself, contact our government relations department.