Yes, Ohio taxes capital gains. As of 2021, Ohio’s capital gains tax rate is 5%. This rate falls in the middle range when compared to other states. Some states do not have a specific capital gains tax, while others may have higher or lower rates.
Taxation of Capital Gains
Ohio does not have a separate capital gains tax rate. The gain is treated the same as other ordinary income for state tax purposes and is taxed according to your ordinary state tax rates, which range from 0.743% to 7.5%. So depending on your income, your tax rate on the gain will likely be up to 7.5%.
Consulting a tax professional can be beneficial to ensure accurate reporting and to help navigate the complexities of tax law.
Exemptions and Deductions
Ohio has several exemptions and deductions available:
- The “small business investor deduction” allows individuals to deduct up to 50% of their capital gains on investments in Ohio small businesses.
- There are also exemptions on certain types of property sales, like qualified agricultural, timber, and coal property. Eligibility criteria for exemptions and deductions vary.
Ohio also offers an installment payment option for those owing significant capital gains tax, though interest may be charged on unpaid balances.
Consequences of Inaccurate Reporting
Failure to accurately report capital gains can result in penalties and interest. Consulting tax professionals is recommended to avoid potential consequences.
What Income is Not Taxed in Ohio?
This information was not provided in the original text.
States Without Capital Gains Tax
The original text repeats the information regarding Ohio’s tax rate and offers no specific information about states with no capital gains tax, hence this section has been omitted.