Despite Changes In Law, State Expects 70 Percent To Get Tax Refunds
Tax Refunds
The Ohio Department of Taxation expects most Ohioans to get a tax refund even though they won?t get the tax reduction they may have expected.Related Links
2009 IRS 1040 Instructions (See pages 6 and 7)
Ohio I-File For Filing State Income Taxes
Ohio eForms
ODT 2009 Employer Withholding Instructions (PDF)
ODT’s Filing Season Central
ODT’s Dos and Don’ts
Effect of Income Tax Rate Freeze
The following table shows what a temporary freeze of Ohio’s income tax rates at 2008 levels would mean for a typical family of four at varying levels of income.
| Income | 2008 tax | 2009 tax with reduction | 2009 tax with freeze |
| $30,000 | $351 | $325 | $346 |
| $60,000 | $1,474 | $1,389 | $1,467 |
| $100,000 | $3,283 | $3,105 | $3,274 |
| $200,000 | $8,692 | $8,238 | $8,680 |
Published: January 4, 2010
Updated: January 4, 2010
now
COLUMBUS, Ohio—The Ohio Department of Taxation expects most Ohioans to get a tax refund even though they won’t get the tax reduction they may have expected.
State income taxes have dropped 4.2 percent each year since 2005 and were expected to drop to a cumulative 21 percent in 2009. But in December 2009, in a last-minute effort to plug a nearly-billion-dollar gap in the state budget, the General Assembly approved a two-year delay in the last phase of the reductions.
“For the average family of four, it means they’re going to pay about the same amount as they did the previous year,“ says John Kohlstrand of the Ohio Department of Taxation. “The same tax rates the state used for 2008 are going to be used for 2009.“
For most taxpayers, wage withholdings throughout the year are enough to cover the amount of taxes they owe. Employers base the withholding rates on tables supplied by the Department of Taxation. Until the General Assembly changed it, the law required a reduction in taxes for 2009 and, accordingly, employers were told they could withhold a little bit less from employee’s paychecks.
“Most people are still going to withhold more than is necessary to cover the amount of tax that they owe at the end of the year,“ says Kohlstrand. “So, based on that, the Tax Commissioner made the decision to leave these withholding tables in place.“
“Even though employers are taking a little bit less out of paychecks than before, they’re still taking out more than enough for most people to cover the amount of tax that they owe.“
The last phase of reductions is still scheduled for 2011, Kohlstrand says, so the withholding tables and the tax rates will catch up with each other again then.
“If you based your estimated payments or lowered your withholding thinking the tax would be less, you will find you owe more” than you planned, says Linda Hoaja Wiget, a Certified Public Accountant in
Clintonville.
She says some people may have calculated their payments and withholdings incorrectly and too low because the changes came so late in the year.
“Ohio has said that they will take that into account and any sort of penalty will be adjusted for that fact,“ she says.
ODT expects more than 70 percent of Ohioans to get tax refunds.
The taxpayers most likely to be affected by the change are those who are not part of the usual withholding system: the self-employed and those who have significant incomes outside the traditional workplace.
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