A majority of small business owners and entrepreneurs in Ohio are eligible for a 50 percent tax deduction on their first $250,000 of business income as part of tax cuts approved last year.  For businesses to determine whether they are eligible and learn how to file for this deduction, a guide has been posted to the Ohio Department of Taxation's website.

As part of the tax cut, a business owner can exclude 50 percent of Ohio net business income from the adjusted gross income they report on their Ohio personal income tax return. If the business has multiple owners, each is eligible to claim the deduction.  This exclusion is available on up to $250,000, meaning the deduction is capped at $125,000 for each investor or owner. 

Owners of, and investors in, Ohio businesses structured as Pass Through Entities qualify for this new tax cut. PTE owners/investors receiving income from the business pay federal and state personal income taxes on that income.  PTEs include: sole proprietorships, partnerships, Subchapter S corporations (S-corps) and Limited Liability Companies (LLCs).

The State is providing the tax cuts to spur small business growth and investment.  According to Ohio Tax Commissioner Joe Testa "The sooner these businesses have extra money in their pockets, the faster they can begin to grow their business by using the savings to increase advertising, buy new equipment or hire help."