Individual Income Tax – Ohio O hio’s individual income tax can be traced back to 1912, when voters approved a constitutional amendment specifi cally au­ thorizing the General Assembly to levy such a tax. Legislative action did not follow until December 1971 when the tax was enacted ef­ fective Jan. 1, 1972 for individuals and estates. In 2002 the General Assembly expanded the income tax to include trusts. The individual income tax is currently state government’s largest source of revenue. During fiscal year 2009, total net collections exceeded $8.3 billion. Of that amount, more than $7.6 billion was directed to the General Revenue Fund, where it represented about 44.6 percent of general fund tax rev­ enue. Ohio’s income tax rates have been gradually falling since 2005, when the 126th General Assembly enacted House Bill 66, scheduling five annual across-the-board income tax rate reductions of 4.2 percent each. Accordingly, for the 2008 tax­ able year, income tax rates were 16.8 percent lower than they had been for 2004, the year before H.B. 66 was enacted. In 2009, state law was revised to temporarily postpone the fifth and final income tax rate reduction. As a result, the income tax rates used for 2008 will also apply to the 2009 and 2010 taxable years. The fifth and final rate reduction is now scheduled for taxable year 2011, when tax rates will be 21 percent lower across the board than they were for 2004. Withholding tables implemented in January 2009 remained in effect. During the 2009 taxable year, the income tax included nine brackets ranging from 0.618 percent on the first $5,000 of tax­ able income to 6.24 percent on taxable income in excess of $200,000. Individual taxpayers whose Ohio taxable income is less than or equal to $10,000 are effectively exempt from the tax since they receive a full credit against the tax otherwise due. This chapter includes twelve tables presenting information compiled from 2007 Ohio individual income tax returns (fi led in 2008). The data shows that more than 5.5 million taxpay­ ers filed tax returns, reporting total federal adjusted gross income of approximately $376 billion. Approximately 1.4 mil­ lion returns indicated no tax liability. Taxpayer (Ohio Revised Code 5747.01(N)) The state individual income tax applies to every individual, trust and estate residing in Ohio, earning or receiving income in Ohio, or other­ wise having nexus with Ohio. The tax also applies to winners of Ohio lottery prizes. Withholding responsibilities apply to employers who pay wages and sala­ ries to employees who work in Ohio. Tax Base (R.C. 5747.01) The tax base is federal adjusted gross income (for individ­ uals) or taxable income (for estates and trusts), plus or minus adjustments according to Ohio income tax law. Calculating net liability for the tax can be condensed to four steps, as follows: • Calculate Ohio adjusted gross income by applying Ohio additions and deductions to federal adjusted gross in­ come, as reported on the federal form 1040. • Calculate Ohio taxable income by subtracting personal and dependent exemptions from Ohio adjusted gross income. For 2009, each taxpayer received a personal exemption, and an exemption for each dependent, of $1,550. • Apply tax rates to Ohio taxable income to calculate gross tax liability. • Calculate net tax liability by subtracting credits and grants from gross tax liability. Rates (R.C. 5747.02) The individual Ohio income tax rates for taxable years 2008 and 2009 are shown below. Taxable Income Tax Over But Not Over $0 - $5,000 0.6.18% $5,001 - 10,000 $30.90, plus 1.236% of excess over $5,000 10,001 - 15,000 $92.70, plus 2.473% of excess over $10,000 15,001 - 20,000 $216.35, plus 3.091% of excess over 15,000 20,001 - 40,000 $370.90, plus 3.708% of excess over $20,000 40,001 - 80,000 $1,112.50, plus 4.327% of excess over $40,000 80,001 - 100,000 $2,843.30, plus 4.945% of excess over $80,000 100,001 - 200,000 $3,832.30, plus 5.741% of excess over $100,000

$200,001 $9,573.30, plus 6.24% of excess over $200,000 68 tax. hio.gov

Individual Income Tax-Ohio tax. hio.gov 69 Beginning in 2010, the Tax Commissioner will annually adjust the size of each bracket for inflation each July, per R.C. 5747.02(A). Rates will not change as part of this adjustment. Division (B) of this same code section allows for rates to be temporarily adjusted downward in any year that the director of the Office of Budget and Management certifies that a sur­ plus exists in the Ohio Budget Stabilization (or “Rainy Day”) Fund. Additions, Deductions and Exemptions The starting point for the Ohio individual income tax is fed­ eral adjusted gross income (FAGI). Additions and deductions are applied to FAGI in order to arrive at Ohio adjusted gross income (OAGI). Personal and dependent exemptions (R.C. 5747.025) For 2009, a $1,550 personal exemption was available for each taxpayer and for each dependent of the taxpayer. The amount of this exemption, which is subtracted from Ohio ad­ justed gross income before tax rates are applied, is adjusted annually based upon the gross domestic product defl ator. Major additions for individuals Major additions for individuals, to the extent not already included in FAGI, include: • non-Ohio state or local government interest and divi­ dends. • pass-through entity add back. • income from an electing small business trust. • losses from the sale of Ohio public obligations. • non-medical withdrawals from an Ohio Medical Savings Account. • reimbursement of expenses previously deducted. • non-education expenditure from a college savings ac­ count. • add back of fi ve-sixths of the depreciation adjustment for Internal Revenue Code sections 168(k) and 179. Major deductions for individuals Major deduction for individuals, to the extent not excluded from FAGI, include: • certain federal interest and dividends. • reciprocity income (income tax paid to other states; for details, see Special Provisions). • state or municipal income tax overpayments deducted on a prior year’s federal income tax return. • qualifi ed disability and survivorship benefi ts. • Social Security and some railroad retirement benefi ts. • contributions to a college savings account administered by the Ohio Tuition Trust Authority. • certain payments to members of the Ohio National Guard. • unsubsidized health insurance, long-term care insur­ ance, and excess medical expense deduction. • funds deposited into, and earnings on, an Ohio Medical Savings Account. • losses from a grantor trust or an electing small busi­ ness trust. • wage and salary expenses not deducted due to the fed­ eral targeted jobs or work opportunity tax credits. • interest income from Ohio public and Ohio purchase obligations and gains from the sale or other disposition of Ohio public obligations. • refund or reimbursement of a prior year federal item­ ized deduction. • repayment of income reported in a prior year. • amount contributed to an individual development ac­ count. • one fifth of the depreciation added back in each of the previous fi ve years. • military pay received while the resident service mem­ ber is stationed outside Ohio. • qualifi ed organ donation expenses. For a complete listing and explanation of the adjustments to federal adjusted gross income, see form IT 1040, Ohio Income Tax Return and Instructions. Adjustments to federal taxable income for estates and trusts For a complete listing and explanation of the adjustments, see form IT 1041, Ohio Fiduciary Income Tax Return and Instructions. Credits Individual Credits All individual filers may claim a $20 credit for each per­ sonal and dependent exemption claimed on their return. This credit is known as the personal and dependent exemption credit (R.C. 5747.022). A number of other credits are also available. They include, in alphabetical order: Adoption credit (R.C. 5747.37) – Individual taxpayers may claim a credit for adoption expenses up to a maximum of $1,500 per child. Adoption of stepchildren does not qualify for this credit. Child and dependent care credit (R.C. 5747.054) – Individual and estate taxpayers with an income of less than $40,000 may claim this credit if they made payments that quali­ fied for the federal child and dependent care credit on the federal income tax return. Displaced worker training credit (R.C. 5747.27) – An indi­ vidual taxpayer may claim a credit for training expenses incurred within 12 months of losing or leaving a job due to abolishment of position or shift. The maximum credit is 50 percent of the training expenses or $500, whichever is lower. Joint fi ling credit (R.C. 5747.05(G)(1)) – A husband and wife who file jointly are allowed a tax credit if each spouse has qualifying Ohio adjusted gross income of $500 or more. Qualifying income does not include income from interest, dividends and distributions, royalties, rents, capital gains, and state or municipal income tax refunds. The maximum credit is $650. The credit is a percentage of the tax after all credits are claimed other than the resident, nonresident, part-year resident, and business credits.

Individual Income Tax-Ohio 70 tax. hio.gov Low-income taxpayer credit (R.C. 5747.056) – Individual taxpayers whose Ohio taxable income is less than or equal to $10,000 receive a full credit against the tax otherwise due. Lump sum distribution credit (R.C. 5747.05(D)) – Individual taxpayers 65 years of age or older may claim this credit if they received a lump sum distribution from a pension, retirement, or profit sharing plan. The calculation is based upon the expected remaining years of life multiplied by the value of the senior citizen credit. Taxpayers who claim this credit are barred from claiming future senior citizen credits. Lump sum retirement credit (R.C. 5747.055(C), (D), (E)) – Individual taxpayers may claim this credit if, on retirement, they received a lump sum distribution from a qualifi ed pension, retirement, or profit sharing plan during one tax year. Taxpayers who claim this credit may not claim a re­ tirement income credit in future tax years unless this credit exceeds their tax due. If the credit exceeds their tax due for the year, they may receive a reduced credit in subsequent tax years. A taxpayer may also claim a credit in a future tax year if they receive another pension, retirement, or profit-sharing lump-sum distribution in one taxable year. Nonresident credit (R.C. 5747.05(A)) – Nonresidents may calculate a credit if part of their income was not earned or received in Ohio. Ohio lottery winnings do not qualify for this credit. Political contributions credit (R.C. 5747.29) – Individual and estate taxpayers may claim a credit for contributions made to the campaign committees of candidates for the Ohio General Assembly, the Ohio Supreme Court, and for statewide executive offices. The maximum credit is $50 for single, head of household, and married fi ling separate filers and $100 for married filing joint fi lers. Resident credit (R.C. 5747.05(B)) – Resident individuals and resident estates may calculate a tax credit if part or all of their income is taxed in another state. The calculation for trusts differs from that used for individuals and estates. Retirement income credit (R.C. 5747.055) – Individual and estate taxpayers receiving retirement benefi ts, annuities, or distributions from a retirement or profit sharing plan that are included in Ohio adjusted gross income are al­ lowed a credit based on the amount of retirement income received during the taxable year. The maximum credit is $200. Senior citizen credit (R.C. 5747.05(C)) – Individuals may claim a $50 credit per return if the taxpayer was 65 years of age on or before Dec. 31 of the taxable year. Estates may claim the credit if the decedent was 65 years or older at the date of death. Business credits Investors in pass-through entities are eligible for a refundable credit equal to the amount of tax paid on their behalf by the pass-through entity (R.C. 5747.059). A number of other business credits also apply to indi­ viduals, estates, and trusts. For more information, see the Business Tax Credits chapter of this annual report. Special Provisions Military pay and income of military spouses Military pay received while the service member is sta­ tioned in Ohio is taxable for Ohio residents, but is not taxable while the service member is stationed outside the state. If the taxpayer is not an Ohio resident, Ohio does not tax the mili­ tary pay. Ohio does tax nonmilitary pay earned in Ohio that is included in federal adjusted gross income. In November 2009, federal law was amended to extend the principle of domicile that applies to service members to their spouses. Starting in taxable year 2009, nonresident civil­ ian spouses who reside with their spouse on a duty station in Ohio may deduct income earned in Ohio from their Ohio return. Resident military spouses who reside outside the state are still subject to Ohio income taxes. Reciprocity Reciprocal agreements with other states (R.C. 5747.05(A) (3)) may affect filing of an Ohio return. Because of agree­ ments Ohio has with bordering states (Indiana, Kentucky, West Virginia, Michigan, and Pennsylvania), an individual does not have to file an Ohio income tax return if: • the taxpayer was a full-year resident of one of the fi ve listed states for the taxable year, and • the taxpayer’s only source of income within Ohio was from wages, salaries, tips, or commissions generally re­ ceived from employers unrelated to the taxpayer. These reciprocal agreements do not apply to nonresidents who directly or indirectly own at least 20 percent of the stock or other equity of Ohio pass-through entities (S corporations or partnerships; see R.C. 5733.40(A)(7)) for details. These nonresidents must include this compensation in Ohio taxable income but can treat this compensation as business income, which must be apportioned for purposes of computing the nonresident credit. Ohio tax form IT 2023 is used to compute this credit. Residency Residency status affects the calculation of the Ohio income tax. Individual taxpayers who have no more than 182 contact periods in Ohio and who have an abode outside of Ohio for the entire year may, under certain circumstances, declare themselves to be a nonresident of Ohio. For details, see infor­ mation release IT 2007-08 – “Personal Income Tax: Residency Guidelines - Tax Imposed on Resident and Nonresident Indi­ viduals for Post-2006 Taxable Years,” issued in December 2007 and revised in July 2008. Filing and Payment Dates (R.C. 5747.07-5747.09) For individuals, estates and trusts Annual return –The annual income tax return is due by April 15 for calendar year taxpayers without an extension. Fiscal year returns are due by the 15th day of the fourth month after the end of the fi scal year. Quarterly payments –Taxpayers must file quarterly declara­ tions if they expect their tax to be under-withheld by more than $500. Such taxpayers must make estimated payments by

Individual Income Tax-Ohio tax. hio.gov 71 April 15, June 15, and Sept. 15 of the current year and by Jan. 15 of the next year. Electronic fi ling – Generally speaking, tax return preparers who file more than 75 original income tax returns, reports, or other tax payment documents in a calendar year that begins on or after Jan. 1, 2008, must begin filing electronically on Jan. 1, 2010. For employers An employer accumulating undeposited taxes of $100,000 or more is required to make payment within one banking day by electronic funds transfer (EFT). Otherwise, the following rules apply: • if an employer withheld no more than $2,000 during the 12 months ending on June 30 of the preceding year, payments are due within 30 days after the quarter end­ ing in March, June, September, and December. • if an employer withheld more than $2,000 and less than $84,000 during the 12 months ending on June 30 of the preceding year, payments are due within 15 days after the end of the month. • if an employer withheld at least $84,000 during the 12 months ending on June 30 of the preceding year, pay­ ments are due within three banking days after the end of the partial weekly period and must be made by EFT. Disposition of Revenue During fiscal year 2009, 91.7 percent of revenue from the state income tax – or $7,629.1 million – was distributed to the General Revenue Fund. The rest was distributed to the Local Government Fund (8.2 percent or $686.5 million) and to sev­ eral much smaller funds. House Bill 119, the fiscal year 2008-09 operating budget bill enacted in 2007, revised the formula and the revenue account­ ing associated with the local government funds. Starting in January 2008, all income tax revenue has been directed to the General Revenue Fund. For details on the local government fund changes, see the Local Government Funds chapter. The Ohio Constitution requires that at least 50 percent of the income tax collections be returned to the county of origin. This provision is met primarily through General Revenue Fund allocations to education, Local Government Fund distri­ butions, and local property tax relief (the 10 percent and 2.5 percent property tax rollbacks and the homestead exemption for senior citizen homeowners and certain disabled hom­ eowners). Administration The Department of Taxation administers the Ohio income tax on individuals, estates, and trusts. Ohio Revised Code Citations Chapter 5747. Recent Legislation House Bill 318, 128th General Assembly (FY 2010-2011 budget correction bill, effective Dec. 30, 2009) This act postponed the last of five income tax rate reduc­ tions scheduled as part of the 126th General Assembly’s House Bill 66. The fifth and final reduction was originally scheduled for taxable year 2009. It is now scheduled for taxable year 2011. Public Law 111-97, (the “Military Spouses Residency Relief Act,” effective Nov. 11, 2009) This act of Congress amended the “Service members Civil Relief Act” to extend the principle of domicile that ap­ plies to service members to their spouses as well. Starting with tax years that begin Jan. 1, 2009, an individual who resides in a taxing the same jurisdiction solely due to the military orders of his/her spouse – and who is domiciled in another jurisdiction that is the same jurisdiction as his/her military spouse – remains subject to income tax in the ju­ risdiction of their domicile and is exempt from income tax in the jurisdiction where he/she is living with their service member spouse. Tables and Charts The following tables provide a wide variety of statistical information from Ohio individual income tax returns. Please note the following cautions about this data. The tables reflect all tax returns filed to date by taxpayers for the taxable year noted. The tables include tax returns that indicate tax liability as well as returns with no tax liability. For example, taxpayers with Ohio taxable income below $10,000 receive a tax credit that results in no tax liability. The income of Ohio residents, part-year residents and nonresidents that filed an Ohio individual income tax return has not been reduced to exclude income earned or received outside of Ohio. This is because Ohio law uses tax credits – rather than income exclusions – to prevent income earned or received outside this state from being taxed by Ohio. As a re­ sult, income figures in these tables (such as federal adjusted gross income, Ohio adjusted gross income, and Ohio taxable income) include non-Ohio income. Also, amounts labeled as “Ohio income tax” are after subtraction of the resident credit, part-year resident credit, nonresident credit, and all other tax credits applicable under Ohio law. Also, note that the income of residents of states adjacent to Ohio is reported in a somewhat different manner from that described above. Under a reciprocity agreement with those states, the wage and salary income earned in Ohio by resi­ dents of one of those states is not taxed by Ohio. For those residents, such income is excluded from Ohio adjusted gross income and Ohio taxable income.

Individual Income Tax-Ohio 72 tax. hio.gov Chart 1 Local Distribution of Revenue from Individual Income Tax: Fiscal Year 2009 (figures in millions) Total $8,323.4 General Revenue Fund $7,629.1 91.7% Government Fund $686.5 8.2% Other1 $7.7 0.1% General Revenue Fund $7,629.1 91.7% Local Government Fund $686.5 8.2% Other1 $7.7 0.1% Chart 2 Annual Returns $987.3 Other Individual Income Tax Type of Payment: Employer Withholding $7,319.9 75.6% $91.2 0.9% Fiscal Year 2009 10.2% Trusts (figures in millions) $52.3 0.5% Total $9,679.72 Quarterly Estimated $1,235.0 12.8% Employer Withholding $7,319.9 75.6% Quarterly Estimated $1,235.0 12.8% Trusts $52.3 0.5% Annual Returns $987.3 10.2% Other $91.2 0.9% Source: Department of Taxation. 1 Consists of amounts deposited in the Attorney General Claims Fund and amounts deposited in Ohio Political Party Fund (based on taxpayer checkoffs). 2 Includes $1,355.4 million refunded back to taxpayers.

100,001 and above 50,001 - 100,000 30,001 - 50,000 20,001 - 30,000 10,001 to 20,000 under 10,000 Individual Income Tax-Ohio tax. hio.gov 73 Chart 3 Individual Income Tax Returns, Income and Tax by Income Level: Tax Year 2007 16.9% 1.3% 0.0% 15.5% 3.4% 0.9% 13.6% 4.9% 2.9% 20.3% 23.2%24.0% 27.0% 10.5% 54.8% 59.2% 11.6% 10.0% 0 10 20 30 40 50 60 Liability FAGI Returns under $10,000 $10,001 - 20,000 $20,001-$30,000 $30,001-50,000 $50,001-100,000 $100,001 and above

74 Individual Income Tax-Ohio hio tax. .gov Table 1 2007 Ohio Individual Income Tax Returns, by Income Level Under $5,000 461,073 $1,234,071,963 $1,197,728,788 $823,800,053 $537,867,236 $3,670,779 $5,001 - $10,000 467,370 3,482,906,915 3,349,326,834 957,511,664 2,415,247,116 18,343,758 $10,001 - $15,000 437,711 5,466,147,927 5,218,747,395 1,021,564,157 4,213,321,837 45,387,628 $15,001 - $20,000 416,741 7,281,775,430 6,946,203,969 1,014,624,466 5,946,136,959 90,952,370 $20,001 - $25,000 386,378 8,682,337,898 8,276,348,774 967,653,154 7,321,040,501 141,633,555 $25,001 - $30,000 359,639 9,881,064,372 9,402,663,262 918,644,606 8,494,138,932 194,027,508 $30,001 - $35,000 331,788 10,769,029,237 10,239,596,932 865,303,458 9,382,663,795 238,453,592 $35,001 - $40,000 296,584 11,108,111,095 10,547,591,607 792,575,809 9,761,632,050 266,309,105 $40,001 - $45,000 261,356 11,091,872,619 10,497,996,209 729,930,000 9,773,646,700 281,068,955 $45,001 - $50,000 227,313 10,786,489,899 10,186,884,967 673,833,851 9,517,680,003 288,463,456 $50,001 - $55,000 201,724 10,579,036,155 9,955,933,103 628,427,102 9,331,450,342 295,505,523 $55,001 - $60,000 176,873 10,162,204,906 9,562,200,171 574,621,950 8,990,681,397 295,372,333 $60,001 - $65,000 159,077 9,935,749,285 9,357,258,625 536,933,555 8,823,117,917 298,915,614 $65,001 - $70,000 143,699 9,693,524,628 9,143,643,028 503,064,451 8,643,136,763 300,492,757 $70,001 - $75,000 131,225 9,506,951,486 8,979,212,766 474,197,850 8,507,159,635 302,224,058 $75,001 - $80,000 117,618 9,110,314,543 8,617,414,387 437,279,400 8,181,956,321 296,151,733 $80,001 - $85,000 105,147 8,669,758,303 8,220,380,071 399,963,650 7,821,938,908 287,947,592 $85,001 - $90,000 91,891 8,035,696,562 7,641,248,951 358,703,900 7,283,981,293 273,414,550 $90,001 - $95,000 80,561 7,448,066,130 7,105,405,901 321,262,002 6,785,209,667 259,877,129 $95,001 - $100,000 71,309 6,949,560,554 6,658,194,202 289,982,600 6,369,056,801 248,525,966 $100,001 - $125,000 226,075 25,051,365,893 24,035,601,393 934,136,402 23,104,354,977 949,001,423 $125,001 - $150,000 107,911 14,714,550,956 14,152,425,700 448,382,052 13,705,183,665 611,776,512 $150,001 - $175,000 60,740 9,808,105,529 9,459,743,760 252,663,950 9,207,632,420 434,175,048 $175,001 - $200,000 38,726 7,228,067,771 6,994,448,791 162,346,350 6,832,442,431 334,791,850 $200,001 - $250,000 44,002 9,778,188,838 9,500,720,743 184,647,350 9,316,280,114 477,397,080 $250,001 - $300,000 23,533 6,423,538,756 6,265,734,861 99,177,100 6,166,720,742 332,626,260 $300,001 - $350,000 14,343 4,639,310,267 4,536,816,322 60,889,850 4,476,000,762 249,724,401 $350,001 - $400,000 9,823 3,667,763,024 3,597,921,396 42,225,450 3,555,747,368 203,147,578 $400,001 - $450,000 7,326 3,106,562,789 3,046,998,710 31,640,450 3,015,397,410 175,354,328 $450,001 - $500,000 5,806 2,752,229,836 2,708,898,772 24,973,350 2,683,961,439 158,250,088 $500,001 - $750,000 15,718 9,493,427,457 9,365,796,711 67,301,750 9,298,546,994 561,601,737 $750,001 - $1,000,000 6,720 5,779,364,033 5,709,586,587 28,373,600 5,681,224,633 351,907,413 $1,000,001 - $1,500,000 5,960 7,202,962,466 7,120,159,762 24,548,500 7,095,633,008 446,945,540 $1,500,001 - $2,000,000 2,801 4,832,998,737 4,781,151,511 11,575,350 4,769,580,515 304,106,393 $2,000,001 - $3,000,000 2,765 6,716,978,224 6,631,615,641 11,098,300 6,620,530,391 425,544,198 $3,000,001 - $4,000,000 1,438 4,974,758,903 4,916,562,094 5,869,600 4,910,692,496 317,511,801 $4,000,001 - $5,000,000 878 3,911,109,857 3,866,780,978 3,671,400 3,863,109,578 250,546,168 $5,000,001 - $10,000,000 1,890 13,030,094,669 12,836,365,569 7,658,900 12,828,713,919 835,161,918 1,639 63,028,013,803 62,378,528,579 6,662,750 62,371,868,729 4,083,474,950 Total 5,503,171 $376,014,061,715 $363,009,837,822 $15,697,720,132 $347,604,685,766 $15,929,782,647 Reported Value of Ohio Tax Number of Personal Taxable Before Income Level Returns FAGI OAGI Exemptions Income Credits $10,000,001 $2,120 2,233 33,832 334,115 1,111,064 2,350,686 3,532,916 5,226,633 7,448,934 9,968,191 11,986,351 11,252,116 12,451,054 13,985,472 15,558,202 15,328,381 10,548,398 9,204,050 8,828,268 8,468,103 31,950,739 20,178,760 13,862,616 10,437,188 14,290,366 8,569,178 4,959,991 3,287,464 2,372,450 1,853,425 4,997,105 2,025,327 1,603,696 735,800 654,551 343,850 179,400 375,700 300,300 $270,599,026 Value of Joint Filer Credit $195,986 74,879 19,870,713 62,746,805 111,406,269 162,650,709 206,667,059 234,280,058 248,674,011 255,159,581 260,648,148 262,507,568 265,509,800 266,551,813 267,077,416 262,200,974 259,598,699 247,228,449 235,220,996 225,224,949 856,725,889 546,417,690 383,712,782 292,073,953 410,524,211 280,369,488 207,021,739 164,651,930 139,602,342 123,813,269 423,059,478 243,578,273 274,343,715 159,522,228 193,791,684 125,971,071 87,492,554 253,492,927 417,473,408 $9,437,133,510 Total Income Tax Liability1 1 This represents tax liability after all tax credits. Although the joint filer credit is presented in this table, it is not the largest income tax credit. The combined resident and nonresident tax credits account for the largest amount of credit value, totalling $5.8 billion.

Table 2 Comparison of 2006 and 2007 Individual Income Tax Returns Income Level Number of Federal Adjusted Ohio Taxable (Federal Adjusted Joint Filer Ohio Income Returns Gross Income Income Gross Income) Credit Tax 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 Under $5,000 442,855 461,073 $865,831,672 $1,234,071,963 $542,298,534 $537,867,236 $2,523 $2,120 $259,010 $195,986 $5,001 - $10,000 448,276 467,370 3,340,830,367 3,482,906,915 2,348,480,010 2,415,247,116 2,964 2,233 87,798 74,879 $10,001 - $15,000 426,571 437,711 5,328,512,670 5,466,147,927 4,151,259,532 4,213,321,837 37,422 33,832 21,022,911 19,870,713 $15,001 - $20,000 414,712 416,741 7,249,288,383 7,281,775,430 5,985,739,510 5,946,136,959 398,981 334,115 66,722,763 62,746,805 $20,001 - $40,000 1,377,901 1,374,389 40,513,779,336 40,440,542,602 35,304,738,992 34,959,475,278 13,990,511 12,221,299 760,172,973

715,004,094 $40,001 - $80,000 1,391,730 1,418,885 79,252,062,072 80,866,143,522 70,765,224,722 71,768,829,079 106,980,640 97,978,702 2,160,206,161

2,088,329,312 $80,001 - $100,000 331,699 348,908 29,550,210,621 31,103,081,549 27,006,577,929 28,260,186,668 37,540,901 37,048,818 971,098,585

967,273,092 $100,001 - $200,000 385,999 433,452 50,489,027,233 56,802,090,149 47,135,053,173 52,849,613,493 71,841,070 76,429,304 1,939,922,168

2,078,930,314 $200,001 128,986 144,642 122,799,421,020 149,337,301,659 120,117,072,359 146,654,008,099 42,022,238 46,548,604 3,222,435,626 3,504,708,316 TOTAL 5,348,729 5,503,171 $339,388,963,374 $376,014,061,715 $313,356,444,763 $347,604,685,766 $272,817,250 $270,599,026 $9,141,927,994

$9,437,133,510 Table 3 Comparison of 2006 and 2007 Individual Income Tax Returns with Tax Liability Income Level Number of Returns with Tax Liability Ohio Income Tax 2006 2007 2006 2007 Under $5,000 788 453 $259,010 $195,986 $5,001 - $10,000 833 287 87,798 74,879 $10,001 - $15,000 181,364 181,102 21,022,911 19,870,713 $15,001 - $20,000 337,569 333,652 66,722,763 62,746,805 $20,001 - $40,000 1,326,705 1,312,210 760,172,973 715,004,094 $40,001 - $80,000 1,370,009 1,392,110 2,160,206,161 2,088,329,312 $80,001 - $100,000 327,486 343,596 971,098,585 967,273,092 $100,001 - $200,000 379,860 425,813 1,939,922,168 2,078,930,314 $200,001 123,488 138,138 3,222,435,626 3,504,708,316 TOTAL 4,048,102 4,127,361 $9,141,927,994 $9,437,133,510 Individual Income Tax-Ohio tax. hio.gov 75

76 tax. hio.gov Individual Income Tax-Ohio Table 4 2007 Ohio Individual Income Tax Returns for All Filing Status Categories Number of Effective Income Level Returns FAGI Ohio Taxable Income Joint Filer Credit Ohio Income Tax Tax Rate1 $5,001 - $10,000 467,370 3,482,906,915 2,415,247,116 2,233 74,879 0.00%

$10,001 - $15,000 437,711 5,466,147,927 4,213,321,837 33,832 19,870,713 0.36%

$15,001 - $20,000 416,741 7,281,775,430 5,946,136,959 334,115 62,746,805 0.86%

$20,001 - $40,000 1,374,389 40,440,542,602 34,959,475,278 12,221,299 715,004,094 1.77%

$40,001 - $80,000 1,418,885 80,866,143,522 71,768,829,079 97,978,702 2,088,329,312 2.58%

$80,001 - $100,000 348,908 31,103,081,549 28,260,186,668 37,048,818 967,273,092 3.11%

$100,001 - $200,000 433,452 56,802,090,149 52,849,613,493 76,429,304 2,078,930,314 3.66% $200,001 144,642 149,337,301,659 146,654,008,099 46,548,604 3,504,708,316 2.35% Total 5,503,171 $376,014,061,715 $347,604,685,766 $270,599,026 $9,437,133,510 2.51% Under $5,000 461,073 $1,234,071,963 $537,867,236 $2,120 $195,986 0.02% Table 5 2007 Ohio Individual Income Tax Returns Claiming Married Filing Joint Status Income Level Number of Returns FAGI Ohio Taxable Income Ohio Income Tax Effective Tax Rate1 Under $5,000 22,483 $55,675,515 $7,758,092 $55,518 0.10% $5,001 - $10,000 38,159 294,624,015 119,443,705 31,559 0.01% $10,001 - $15,000 60,370 764,072,476 458,143,321 468,193 0.06% $15,001 - $20,000 76,931 1,350,546,367 937,301,401 4,113,611 0.30% $20,001 - $40,000 328,096 9,918,790,458 7,686,052,795 121,284,966 1.22% $40,001 - $80,000 715,532 42,839,379,367 36,872,675,853 1,021,769,940 2.39% $80,001 - $100,000 271,583 24,254,205,927 21,886,516,300 740,155,029 3.05% $100,001 - $200,000 358,413 47,043,701,928 43,679,100,210 1,708,588,338 3.63% $200,001 121,641 121,167,649,992 118,953,473,668 2,954,459,550 2.44%

Total 1,993,208 $247,688,646,045 $230,600,465,345 $6,550,926,704 2.64% Table 6 2007 Ohio Individual Income Tax Returns Claiming Single Filing Status Effective Income Level Number of Returns FAGI Ohio Taxable Income Ohio Income Tax Tax Rate1 Under $5,000 433,009 $1,163,826,242 $523,859,718 $139,019 0.01%

$5,001 - $10,000 421,371 3,128,324,697 2,253,393,415 40,018 0.00%

$10,001 - $15,000 365,658 4,553,063,820 3,634,189,133 18,541,610 0.41%

$15,001 - $20,000 316,544 5,518,990,932 4,652,321,342 53,735,798 0.97%

$20,001 - $40,000 885,773 25,584,577,981 22,803,680,717 489,731,069 1.91%

$40,001 - $80,000 528,138 28,451,453,683 25,946,115,529 784,934,637 2.76%

$80,001 - $100,000 54,815 4,854,837,870 4,465,821,163 156,388,631 3.22%

$100,001 - $200,000 54,761 7,162,982,018 6,668,197,743 264,126,939 3.69% $200,001 18,691 21,618,568,075 21,234,780,737 449,127,168 2.08%

3,078,760 $102,036,625,317 $92,182,359,496 $2,216,764,890 2.17% 1 Ohio income tax divided by federal adjusted gross income. Resident and nonresident tax credits have been subtracted in calculationg income tax, but FAGI includes all resident and nonresident income.

Individual Income Tax-Ohio tax. hio.gov 77 Table 7 2007 Ohio Individual Income Tax Returns Claiming Married Filing Separate Status Income Level $5,001 - $10,001 - $15,001 - $20,001 - $40,001 - $80,001 - $100,001 - $200,001 Under $5,000 $10,000 $15,000 $20,000 $40,000 $80,000 $100,000 $200,000 Number of Returns 5,581 7,840 11,683 23,266 160,520 175,215 22,510 20,278 4,310 431,203 FAGI $14,570,206 59,958,203 149,011,631 412,238,131 4,937,174,163 9,575,310,472 1,994,037,752 2,595,406,203 6,551,083,592 $26,288,790,353 Ohio Taxable Income $6,249,428 42,409,996 120,993,846 356,514,216 4,469,783,302 8,950,067,033 1,907,849,206 2,502,315,539 6,465,753,693 $24,821,936,259 Ohio Income Tax $1,449 3,302 860,909 4,897,396 103,988,275 281,625,418 70,729,432 106,215,037 101,121,598 $669,442,816 Effective Tax Rate1 0.01% 0.01% 0.58% 1.19% 2.11% 2.94% 3.55% 4.09% 1.54% 2.55% Table 8 2007 Ohio Individual Income Tax Returns by Ohio Taxable Income Level Income Level Number of Returns $20 Exemption Credit Joint Filer Credit Ohio Income Tax Under $5,000 461,073 $11,459,783 $2,120 $195,986 $5,001 - $10,000 467,370 13,216,119 2,233 74,879 $10,001 - $15,000 437,711 14,096,516 33,832 19,870,713 $15,001 - $20,000 416,741 13,998,267 334,115 62,746,805 $20,001 - $40,000 1,374,389 48,891,497 12,221,299 715,004,094 $40,001 - $80,000 1,418,885 62,875,828 97,978,702 2,088,329,312 $80,001 - $100,000 348,908 18,895,700 37,048,818 967,273,092 $100,001 - $200,000 433,452 24,793,502 76,429,304 2,078,930,314 $200,001 144,642 8,418,120 46,548,604 3,504,708,316 5,503,171 $216,645,332 $270,599,026 $9,437,133,510 1 Ohio income tax divided by federal adjusted gross income. Resident and nonresident tax credits have been sub­ tracted in calculating income tax, but FAGI includes all resident and nonresident income.

78 tax. hio.gov Individual Income Tax-Ohio Table 9 2007 Ohio Individual Income Tax Returns Claiming the Joint Filer Credit, by Income Level Income Level Number of Returns FAGI Ohio Taxable Income Ohio Income Tax Effective Tax Rate Under $5,000 60 -$335 $613,916 $11,272 n/a $5,001 - $10,000 86 663,658 887,186 9,365 n/a $10,001 - $15,000 2,234 31,365,623 25,102,904 138,961 0.44% $15,001 - $20,000 14,130 252,228,716 193,339,992 1,312,154 0.52% $20,001 - $40,000 155,722 4,864,122,414 3,974,662,730 61,362,228 1.26% $40,001 - $80,000 518,765 31,518,223,087 27,785,544,954 762,186,713 2.42% $80,001 - $100,000 222,917 19,920,058,491 18,255,150,839 617,728,935 3.10% $100,001 - $200,000 287,660 37,514,972,693 35,218,368,480 1,377,346,133 3.67% $200,001 76,331 53,869,333,071 52,798,218,513 1,671,695,353 3.10% 1,277,905 $147,970,967,418 $138,251,889,513.7 $4,491,791,114.2 3.04% Table 10 2007 Ohio Individual Income Tax Returns Claiming the Senior Citizen Credit, by Income Level Income Level Under $5,000 $5,001 - $10,000 $10,001 - $15,000 $15,001 - $20,000 $20,001 - $40,000 $40,001 - $80,000 $80,001 - $100,000 $100,001 - $200,000 $200,001

Number of Returns 31,861 51,448 77,375 75,148 190,014 192,147 45,592 59,944 25,786 749,315 FAGI $80,106,302 397,396,913 973,124,987 1,308,945,726 5,511,810,201 10,989,239,134 4,053,831,181 7,977,457,289 35,861,076,850 $67,152,988,584 Ohio Taxable Income $22,839,125 236,422,262 687,872,659 978,066,138 4,000,050,822 7,782,664,723 3,033,417,513 6,529,124,361 34,867,476,612 $58,137,934,216 Senior Citizen Credit $1,593,010 2,572,242 3,868,639 3,757,261 9,500,251 9,606,935 2,279,477 2,997,120 1,289,300 $37,464,235 Retirement Income Credit1 $922,455 4,325,612 9,769,405 10,721,763 28,815,858 29,668,842 6,966,562 8,753,530 3,072,280 $103,016,307 Ohio

Income Tax $7,750 10,206 441,145 2,168,904 43,384,280 179,867,251 91,369,465 243,233,917 694,449,939 $1,254,932,856 1 This represents only the amount of the retirement income credit taken by senior citizen claimants (those 65 and older).

Individual Income Tax-Ohio tax. hio.gov 79 Table 11 2007 Ohio Individual Income Tax Returns: By County Number of Number of County ADAMS ALLEN ASHLAND ASHTABULA ATHENS Returns 12,045 49,679 24,596 45,469 22,860 FAGI $441,080,389 2,258,812,056 1,064,807,886 1,840,678,281 919,783,211 Ohio Income Tax $10,388,626 67,225,644 29,381,797 49,335,528 25,433,800 County LORAIN LUCAS MADISON MAHONING MARION Returns 141,142 197,784 18,554 110,397 28,566 FAGI $7,140,125,651 10,150,465,415 902,687,714 5,183,232,647 1,197,310,024 Ohio Income Tax $221,629,394 329,973,928 26,929,810 157,759,321 32,811,578 AUGLAIZE BELMONT BROWN BUTLER CARROLL CHAMPAIGN 22,487 30,865 19,380 165,939 12,849 17,917 1,101,749,284 1,231,436,250 759,539,953 9,184,900,601 521,350,715 786,806,096 33,499,776 32,715,522 19,398,935 298,656,631 13,895,335 21,848,302 MEDINA MEIGS MERCER MIAMI MONROE MONTGOMERY 83,701 9,150 20,721 49,967 6,486 250,641 5,019,564,503 338,883,660 910,885,188 2,467,689,949 234,409,193 12,813,546,585 168,689,143 8,303,969 25,952,361 75,541,463 5,545,471 401,680,562 CLARK CLERMONT 63,380 90,942 2,739,705,511 5,077,189,675 76,797,036 165,393,900 MORGAN MORROW 6,064 14,775 219,275,602 626,865,288 4,580,521 17,153,101 CLINTON COLUMBIANA 20,712 48,067 898,526,808 1,956,926,790 25,347,937 52,960,886 MUSKINGUM NOBLE 38,620 5,439 1,551,546,808 193,008,543 42,828,141 4,693,411 COSHOCTON CRAWFORD CUYAHOGA DARKE DEFIANCE DELAWARE 16,304 21,522 609,795 25,339 19,280 76,454 620,951,483 809,518,827 35,293,553,377 1,093,905,813 877,197,657 6,909,591,556 15,444,472 20,189,339 1,234,136,905 29,941,191 25,131,766 276,993,732 OTTAWA PAULDING PERRY PICKAWAY PIKE PORTAGE 21,330 9,103 14,852 23,252 11,813 73,041 1,059,817,622 388,687,557 557,763,574 1,063,197,551 443,060,217 3,681,083,550 31,076,180 10,398,816 14,169,019 30,076,815 11,075,532 114,457,875 ERIE FAIRFIELD FAYETTE FRANKLIN 38,298 64,684 13,307 543,036 1,813,941,660 3,382,095,031 515,497,765 29,914,464,711 54,641,787 104,223,818 13,632,579 1,001,844,657 PREBLE PUTNAM RICHLAND ROSS 18,932 17,266 57,025 32,978 817,819,847 822,277,353 2,453,989,818 1,352,825,755 22,372,219 24,391,135 69,957,859 36,812,529 FULTON GALLIA GEAUGA GREENE GUERNSEY HAMILTON 21,215 12,401 45,793 72,770 17,896 386,282 960,789,157 521,821,184 3,628,996,083 4,236,894,200 657,186,618 25,818,781,582 26,732,849 15,020,076 142,204,238 137,489,274 16,892,651 958,812,815 SANDUSKY SCIOTO SENECA SHELBY STARK SUMMIT 30,400 28,111 27,347 24,144 179,543 258,761 1,240,627,409 1,131,477,692 1,074,536,299 1,115,533,915 8,581,146,786 14,795,801,618 32,984,908 29,794,551 28,069,561 33,783,365 263,428,653 503,689,307 HANCOCK HARDIN 34,947 13,616 1,786,798,388 535,633,480 55,811,439 13,855,903 TRUMBULL TUSCARAWAS 100,833 44,743 4,483,907,803 1,840,898,279 128,738,038 50,767,154 HARRISON HENRY HIGHLAND HOCKING 6,861 13,931 18,821 12,504 345,829,162 619,432,504 694,945,787 471,153,073 5,915,521 16,834,688 17,492,984 12,000,494 UNION VAN WERT VINTON WARREN 22,320 14,421 4,868 94,637 1,291,893,113 596,050,722 180,363,489 6,787,459,597 41,842,593 15,710,515 4,390,926 243,048,612 HOLMES HURON JACKSON JEFFERSON KNOX LAKE LAWRENCE LICKING LOGAN 14,696 29,264 13,904 31,031 26,029 118,032 25,946 76,366 22,571 606,927,119 1,222,985,677 546,658,339 1,327,600,465 1,310,041,928 6,178,112,437 991,938,085 3,849,990,879 1,021,425,974 17,057,755 33,330,203 14,350,044 36,291,832 42,354,033 194,102,125 24,849,675 118,840,052 29,335,975 WASHINGTON WAYNE WILLIAMS WOOD WYANDOT TOTAL OTHER1 STATE TOTAL COUNTY 28,052 53,507 18,577 58,520 10,969 5,351,434 151,737 5,503,171 1,254,789,806 2,473,197,667 768,425,611 3,319,161,268 437,183,054 $282,310,427,249 $93,703,634,466 $376,014,061,715 35,586,746 73,020,666 21,011,656 111,191,551 11,662,417 $9,145,615,900 $291,517,611 $9,437,133,510 1 Includes non-resident returns.

Individual Income Tax-Ohio 80 tax. hio.gov Table 12 Rank of Counties By Average Income As Reported On 2007 Ohio Individual Income Tax Returns Note: Includes only returns indicating a county residence. Percentage of County FAGI State Average Rank County FAGI Percentage of State Average Rank ADAMS $36,619 69.4% 85 LOGAN $45,254 85.8% 38 ALLEN 45,468 86.2% 36 LORAIN 50,588 95.9% 19 ASHLAND 43,292 82.1% 45 LUCAS 51,321 97.3% 16 ASHTABULA 40,482 76.7% 64 MADISON 48,652 92.2% 27 ATHENS 40,235 76.3% 66 MAHONING 46,951 89.0% 31 AUGLAIZE 48,995 92.9% 26 MARION 41,914 79.5% 54 BELMONT 39,897 75.6% 68 MEDINA 59,970 113.7% 5 BROWN 39,192 74.3% 73 MEIGS 37,036 70.2% 82 BUTLER 55,351 104.9% 12 MERCER 43,960 83.3% 42 CARROLL 40,575 76.9% 63 MIAMI 49,386 93.6% 25 CHAMPAIGN 43,914 83.2% 43 MONROE 36,141 68.5% 87 CLARK 43,227 81.9% 46 MONTGOMERY 51,123 96.9% 18 CLERMONT 55,829 105.8% 11 MORGAN 36,160 68.5% 86 CLINTON 43,382 82.2% 44 MORROW 42,427 80.4% 52 COLUMBIANA 40,712 77.2% 62 MUSKINGUM 40,175 76.2% 67 COSHOCTON 38,086 72.2% 76 NOBLE 35,486 67.3% 88 CRAWFORD 37,614 71.3% 78 OTTAWA 49,687 94.2% 24 CUYAHOGA 57,878 109.7% 8 PAULDING 42,699 80.9% 51 DARKE 43,171 81.8% 48 PERRY 37,555 71.2% 79 DEFIANCE 45,498 86.2% 35 PICKAWAY 45,725 86.7% 34 DELAWARE 90,376 171.3% 1 PIKE 37,506 71.1% 80 ERIE 47,364 89.8% 30 PORTAGE 50,397 95.5% 22 FAIRFIELD 52,286 99.1% 15 PREBLE 43,198 81.9% 47 FAYETTE 38,739 73.4% 74 PUTNAM 47,624 90.3% 29 FRANKLIN 55,087 104.4% 13 RICHLAND 43,034 81.6% 49 FULTON 45,288 85.8% 37 ROSS 41,022 77.8% 60 GALLIA 42,079 79.8% 53 SANDUSKY 40,810 77.4% 61 GEAUGA 79,248 150.2% 2 SCIOTO 40,250 76.3% 65 GREENE 58,223 110.4% 6 SENECA 39,293 74.5% 72 GUERNSEY 36,723 69.6% 84 SHELBY 46,203 87.6% 33 HAMILTON 66,839 126.7% 4 STARK 47,794 90.6% 28 HANCOCK 51,129 96.9% 17 SUMMIT 57,179 108.4% 9 HARDIN 39,339 74.6% 70 TRUMBULL 44,469 84.3% 40 HARRISON 50,405 95.5% 21 TUSCARAWAS 41,144 78.0% 59 HENRY 44,464 84.3% 41 UNION 57,881 109.7% 7 HIGHLAND 36,924 70.0% 83 VAN WERT 41,332 78.3% 57 HOCKING 37,680 71.4% 77 VINTON 37,051 70.2% 81 HOLMES 41,299 78.3% 58 WARREN 71,721 136.0% 3 HURON 41,791 79.2% 55 WASHINGTON 44,731 84.8% 39 JACKSON 39,317 74.5% 71 WAYNE 46,222 87.6% 32 JEFFERSON 42,783 81.1% 50 WILLIAMS 41,364 78.4% 56 KNOX 50,330 95.4% 23 WOOD 56,718 107.5% 10 LAKE 52,343 99.2% 14 WYANDOT 39,856 75.6% 69 LAWRENCE 38,231 72.5% 75 LICKING 50,415 95.6% 20

TOTAL $52,754 100.0%