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 partnerships, S corporations and LLCs (limited liability companies).
To access the Ohio IT-BUS in TaxSlayer ProWeb, from the main menu of the Ohio Return select;
- Subtractions from Income
- Form OH IT-BUS (Business Income Schedule)
Additional Information