Ohio taxes income from business sources and nonbusiness sources differently on its individual income tax return.
For taxpayers filing Single or Married Filing Jointly, $250,000 of business income earned by and included in federal adjusted gross income is 100% deductible. For taxpayers who file Married Filing Separately, the first $125,000 of business income included in federal adjusted gross income is 100% deductible. Any remaining business income above these thresholds is then taxed at a flat 3% rate.
Only business income earned by a sole proprietorship or a pass-through entity generally qualifies for the deduction. A pass-through entity includes a partnership, S corporation, and LLC (limited liability company).
The business income deduction is calculated on the Schedule of Business Income. Prior to tax year 2023 this schedule was known as Schedule IT-BUS, Business Income.
To access the Ohio Schedule of Business Income in TaxSlayer Pro, from the Ohio Tax Return Menu select;
- Ohio Taxable Income
- Total Deductions
- Small Business Deduction (IT-BUS)
- Total Business Income
Additional Information:
OH DOT: Business Income Deduction
TaxSlayer Pro strives to keep the information on this page timely and accurate but makes no promise or guarantee about the timeliness, accuracy, or completeness of the contents of this page. This is general information and is not intended to be tax advice. You are encouraged to also review the underlying state resources and publications.