Ohio Marriage Penalty (Updated for Tax Year 2010)
It is a little known fact that Ohio's married taxpayers are frequently better off Filing Separate returns instead of Joint when both spouses are employed.
This is due to Ohio’s progressive income tax. The more you make, the greater percentage they take. The marriage penalty begins when Joint Taxable Income reaches $5,800!
Some simple examples of your Ohio IT 1040 are as follows (assumes equal income, no dependants, and no Schedule B – Line 7 credits):
| Ohio IT 1040 Line 5 Joint Taxable Income | Ohio Marriage Penalty |
|---|---|
| $10,000 | $20 |
| 20,000 | 117 |
| 30,000 | 204 |
| 40,000 | 211 |
| 60,000 | 302 |
| 100,000 | 554 |
| 200,000 | 1,434 |
Note: The Joint Filing Credit is factored into all calculations.
An on-line calculator for entering Incomes, Schedule B – Line 7 credits, and Dependent exemptions is available.
Note: The calculator is designed to be used with Microsoft Excel. It may not work on computers without a spreadsheet program. The calculator can be downloaded as an Excel file by using File|Save As on your browser.
The only way to avoid the Ohio Marriage Penalty is to File Separately.
Ohio law requires that the Federal return’s Filing Status match Ohio’s.
Filing Separate on the Federal return requires that you not fund any type of IRA (unless your total income, less a few adjustments, is less than $10,000) and sacrifice a number of different credits and deductions.
Ohio has created a lose-lose situation for working families.
The fix is simple: Ohio should allow us to choose a filing status different from the Federal return’s.
Tell your legislator that you are pro-choice on Filing Status.
Neighboring states including Kentucky, Pennsylvania, and West Virginia allows this; why not Ohio?