Estate Tax

ATTN: Tax Change -- Ohio Estate Tax is Ending

The Ohio Estate Tax is being repealed effective January 1, 2013. The effect is that there will be no estate tax on estates of individuals who die on or after January 1, 2013. This legislative change occurred with the passage of the 2012-2013 Budget Bill, House Bill 153.

Estates of individuals with a date of death on or after January 1, 2013: the Department no longer requires a tax release / tax waiver form before certain assets of a decedent may be transferred to another person. The Department of Taxation requests that counties and county auditors, as well as banks and financial institutions, no longer process and/or submit these forms to the Department of Taxation.

Estates of individuals with a date of death prior to January 1, 2013: the Department still requires a tax release / tax waiver form for all asset transfers greater than $25,000. Estates with a net taxable value of $338,333 or less are effectively exempt from payment of the tax. A 6 percent tax rate applies to any net taxable value above that mark, up to $500,000. A 7 percent rate applies to any net taxable value over $500,000.

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Ohio Estate Tax

In Ohio, an Estate Tax return is filed within nine months of a person’s date of death. One copy is filed with the Probate Court and a second copy is filed with the County Auditor, as agent of the Ohio Tax Commissioner. The tax due is based on the net value of the decedent’s estate. This net value is based on the gross value minus the debts and administration expenses of the estate. The gross value is made up of all assets, such as real estate, bank accounts, stocks, bonds, personalty, and such. The debts and administration expenses are made up of funeral costs, attorney and executor fees, outstanding bills in the name of the decedent, and such. Ohio allows an unlimited marital deduction that allows property to pass from one spouse to another without taxation. Ohio also allows a credit of $500 on the taxes due. Taxes are paid at the Auditor’s office.

Effective for dates of death after January 1, 2001, a maximum tax credit of $6,600 is allowed. For dates of death after January 1, 2002, the maximum tax credit is $13,900. Taxes are paid at the Auditor's Office. It is strongly recommended that an attorney be retained to prepare this return.

The Auditor also issues Consent to Transfer Property (Tax Releases) for Estates. These releases are issued only for assets and accounts with a value greater than $25,000. For assets held jointly between husband and wife only, no release is necessary for any amount. These releases serve two purposes. First, it notifies the financial institution that it may transfer ownership of the asset. Second, it notifies the Department of Taxation that the estate and asset exist and that an estate tax return may be necessary.

For all dates of death on or after January 1, 2002, Section 5731.02 of the Ohio Revised Code, allows a tax credit of $13,900. This credit effectively raises the floor for when an Estate Tax return must be filed from $200,000 to $338,333.

Section 5731.48, of the Ohio Revised Code changes the tax distribution formula. For all dates of death on or after January 1, 2002, the distribution formula will be 80% to the local political subdivision where the decedent was a resident at the time of death and 20% to the State of Ohio General Revenue Fund.

In addition, an Estate tax return must be filed in duplicate at the Probate Court of the county where the decedent was domiciled at date of death. A Certificate of Estate Tax Payment and Real Property Disclosure (E.T. Form 22) must accompany the estate tax return. The original tax return, along with Part II of Form 22 must then be filed with the County Auditor.

Effective for dates of death on or before January 1, 2000 the Tax Commissioner has authorized an automatic six-month extension of time to file the Ohio Estate Tax Return. This permits estates with a date of death on or after January 1, 2000 to have a total of 15 months to file the return. This policy change will be implemented subject to the following provisions:

  • Any additional six-month extensions must be requested in writing on the E.T. Form 24 prior to the expiration of the 15-month deadline. This can be done via facsimile, hand-delivery, or mailed directly to the Ohio Department of Taxation, Estate Tax Division.
  • Interest on any estate tax due will be calculated from nine months from date of death regardless if the estate utilizes the automatic or additional extensions.

Effective January 1, 2001, the tax commissioner will no longer require the inventory of a safe deposit box upon the death of the owner, co-owner or any other person having access to the box, regardless of the date of death. The only exception will be when the Probate Court gives a specific instruction to do so.

Prior to January 1, 2001, the policy was that the County Auditor's Office must inventory all safe deposit boxes located within their county, regardless of whether or not the decedent was domiciled in said county. State law required that an inventory be taken where the decedent had access to the box, whether he/she was the owner or assigned as a deputy.

For further information, please contact the Auditor's Estate Tax department at (740) 455-7109 or the Ohio Department of Taxation at 1-800-977-7711, or http://tax.ohio.gov

COLUMBUS OH 43229-5404