Does Ohio Have an Estate Tax?

Inez Bowie | December 21st, 2012

Recently, Ohio eliminated the Ohio estate tax.  The estates of individuals who die after January 1, 2013 will not be subject to the Ohio estate tax.

But, what about the estates of individuals who die before January 1, 2013?

Taxes will be levied on estates of individuals who die before January 1, 2013 whose estates have a gross value of more than $338,333.00.  For estates valued above that amount, the executor or administrator is required to file tax forms within 15 months of the date of death.  But, interest starts accruing after 9 months (and continues to do so until the tax is paid), so it’s best to file and pay the tax within 9 months of the death.  Aside from interest, there are also penalties – late payments (after 9 months) are subject to 5% per month (or partial month), up to a total of 25%.  If you’re not able to pay the tax within the first 9 months, you can apply for a one time, six-month extension using the Application for Extension of Time to File Ohio Estate Tax Return (ET Form 24).

What is the Ohio estate tax rate?

If the net taxable estate is between $338,333 and $500,000, the tax rate is $13,900 plus 6% of the excess over $338,333. But, there is an Ohio estate tax credit of $13,900.  If the net taxable estate is over $500,000, the tax rate is $23,600 plus 7% of the excess over $500,000. (The $13,900 Ohio estate tax credit also applies to estates over $500,000.) As you’ll notice, the tax rate is based on the net taxable estate, implying that there’s a difference between the gross value and the net value.  What’s the difference?  Tax deductions.  Some common estate tax deductions include: funeral expenses, medical expenses, attorney fees, income or real estate taxes, charitable  bequests and debts of the decedent.

What are the Ohio estate tax forms?

You know you have to file, but how do you do it? The necessary forms can be easily obtained by calling the Ohio Estate Tax Division (1-800-977-7711) or visiting their website.  Depending on your county, you may also be able to get the forms from the Probate Court or the County Auditor.  Executors and Administrators are required to file the follow three (3) forms with the Probate County in the county where the deceased lived:

  • Ohio Estate Tax Return (ET Form 2), must be filed in duplicate
  • Filing Notice (ET Form 5)
  • Certificate of Estate Tax Payment (ET Form 22)

What about Federal Estate Tax?

The elimination of the Ohio estate tax doesn’t mean that the federal estate tax has been eliminated, too.  Unlike Ohio’s tax, the federal estate tax is set to increase in 2013.  Without any action by Congress, the federal estate tax exemption is to sunset, from its current $5.2 million, to $1 million and the federal estate tax rate will sunset, from its current 35%, to 55%.

In addition, if the Federal estate tax sunsets to the previous rules and the State Death Tax Credit is reinstated as a deduction from the federal estate tax, then Ohio will be entitled to the State Death Tax Credit amount.

Like all kinds of taxes, figuring out estate taxes can be tricky.  The state and the federal government both want a piece and you’re left to figure out what you’re supposed to do and how you’re supposed to file.  The confusion of the situation is only exacerbated by your grief and by the fact that most people who file estate tax returns have only had to do it once or twice.

Ohio Estate Tax Help

All of the figures given in this article are based on deaths occurring between January 1, 2012 and January 1, 2013.  For information on estate taxes of the estates of those deceased before January 1, 2012, please visit http://tax.ohio.gov/faqs/Estate/estate.stm.  Need help filing?  Contact Rea & Associates.  Our tax services team can help with both state and federal estate taxes.

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