S.B. 258 Summary

• Allows individual taxpayers age 70½ or older to elect a deduction for all unearned income (excluding wages, salaries, and self-employment earnings) under new division (A)(29) of section 5747.01.

• Establishes a 1% maximum effective tax rate on unearned income for eligible seniors by allowing them to deduct non-earned income from Ohio adjusted gross income.

• Modifies the tax calculation in section 5747.02 to account for the unearned income deduction, with exemptions applied first against adjusted gross income before any excess is applied against deducted amounts.

• Prevents taxpayers claiming the unearned income deduction from also claiming the retirement income credit under section 5747.055 for the same taxable year.

• Updates tax rate schedules for 2008 and later tax years to reflect the reduced maximum rate of 5.925% (down from 6.24% previously) when the unearned income deduction is included in the tax base.