OH HB98

Creates a new deduction for individual taxpayers age 70½ or older allowing them to deduct all unearned income (non-earned income) from Ohio adjusted gross income, beginning in taxable year 2013.

Defines "earned income" as wages, salaries, tips, deferred compensation, and net self-employment earnings, with all other income types (interest, dividends, capital gains, etc.) classified as unearned and eligible for the deduction.

Modifies the tax rate structure for 2013 and thereafter to apply a 1% maximum effective tax rate on the deducted unearned income through a separate calculation method using the tax brackets established for 2011-2012.

Ensures taxpayers claiming the unearned income deduction cannot claim the retirement income credit under section 5747.055 for the same taxable year.

Applies adjustments to personal exemptions and tax calculations to prevent double-benefit situations when the unearned income deduction exceeds adjusted gross income.