If you have heard recent news stories about proposed legislation to end the Ohio estate tax and wondered what all that means, you are not alone. Many people probably do not really know about Ohio estate tax. I will give a basic (and NOT comprehensive) description here. Ohio estate tax is basically a transfer tax. It is a tax imposed on the transfer of wealth that occurs due to a person’s death. If we take all the property we own (and in some situations control) that will pass to others by our death, we have our Gross Taxable Estate. We can often reduce the Gross Taxable Estate by taking deductions such as the costs of funeral and burial, the cost of administration of the estate, any outstanding debts, gifts to charity, etc. One important thing to note is all property that is passing to a surviving spouse is 100% deductable. After deductions are applied, the remainder is known as our Net Taxable Estate. The Net Taxable Estate determines if we pay estate taxes and how much. http://www.cusacklawoffice.com
Our Ohio estate tax system allows a credit to every estate against estate tax. For any date of death from 2002 through the present, that credit is $13,900.00. By virtue of that credit, there is no Ohio estate tax obligation for estates that do not exceed $338,333.00. Estates greater than that face a 6% tax on the value of the estate from $338,333.00 to $500,000.00. The value of the estate over $500,000.00 is taxed at 7%.