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PSA: Just found out OH taxes LTCG as ordinary income
Old 02-12-2021, 07:20 PM   #1
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PSA: Just found out OH taxes LTCG as ordinary income

I always assumed that OH taxed LTCG the same as federal. Nope. They treat all LTCG as ordinary income. Bummer. Now I have to redo my tax calculations.

For states with high income tax, this could really put a crimp on tax gain harvesting.

Carry on.
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Old 02-12-2021, 07:54 PM   #2
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PA taxes all taxable income at the same rate. The good news is that neither SS nor pensions are taxable income.
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Old 02-12-2021, 07:56 PM   #3
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AFAIK, few or no states give favorable treatment to LTCGs.
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Old 02-12-2021, 08:17 PM   #4
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OH does exempt SS.
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Old 02-12-2021, 08:50 PM   #5
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Vermont does too... just exempts the first $5k a year, then ordinary income.

Somewhat surprised that it is a surprise.
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Old 02-12-2021, 09:20 PM   #6
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Vermont does too... just exempts the first $5k a year, then ordinary income.

Somewhat surprised that it is a surprise.
You'd be surprised how many times I have been surprised.
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Old 02-13-2021, 06:50 AM   #7
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You'd be surprised how many times I have been surprised.
One reason I came to this site is so that there are as few surprises as possible when I retire. The number of things I haven't thought of is rapidly exceeding the number of things I have thought of.
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Old 02-13-2021, 06:55 AM   #8
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Vermont does too... just exempts the first $5k a year, then ordinary income.

Somewhat surprised that it is a surprise.
I got a nice pay raise when I moved from VT to “Taxachussets”. No tax on SS or military pension (my main income sources). Flat 5% on all income that is taxed.
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Old 02-13-2021, 07:37 AM   #9
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Yeah, but you have to live in Massachusetts.[emoji45]

P.S. We lived in the greater Boston area for 6 years in the early 80s and both DW and I went to graduate school at Boston University and Northeastern University, respectively, so I'm sort of kidding (sort of).
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Old 02-13-2021, 07:46 AM   #10
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MN taxes LTCG as ordinary income. They have been slow to adjust the standard exemptions to the Federal level but I understand they are this year.


If states are going to have a substantial income tax, such as MN, it would be nice if they would follow the Federal rules to the letter. It would sure make tax planning and prep a lot easier for the state residents.
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Old 02-13-2021, 07:52 AM   #11
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Yeah, but you have to live in Massachusetts.[emoji45]

P.S. We lived in the greater Boston area for 6 years in the early 80s and both DW and I went to graduate school at Boston University and Northeastern University, respectively, so I'm sort of kidding (sort of).
Oh, no problem. I’ve lived a lot of different places. Really likedVT but needed to be closer to family. I would never pick a location based solely on taxes.
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Old 02-13-2021, 08:06 AM   #12
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AFAIK, few or no states give favorable treatment to LTCGs.

Right. A conforming state often begins with the Federal AGI and then you make adjustments in or out.
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Old 02-13-2021, 08:17 AM   #13
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Originally Posted by pb4uski View Post
Yeah, but you have to live in Massachusetts.[emoji45]

P.S. We lived in the greater Boston area for 6 years in the early 80s and both DW and I went to graduate school at Boston University and Northeastern University, respectively, so I'm sort of kidding (sort of).
Now that my child is in college in Massachusetts, I've had to "tone down" my use of the term "Masshole" when referring to MA drivers. {Mods, all in jest here}

signed, NY resident who lives close to MA and VT borders.
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Old 02-15-2021, 05:38 AM   #14
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I'm right there with ya, copyright. MA = the only place I've ever driven where, as you were steaming down the Mass Pike at 70 MPH, it was YOUR responsibility to yield to the crazies that would just pull out on to the road, regardless of how close you were or how fast you were going!!! *** Correction - it was Rt. 9, the Boston-Worcester Tpke ***
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Old 02-15-2021, 05:40 AM   #15
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PA taxes all taxable income at the same rate. The good news is that neither SS nor pensions are taxable income.

What about IRA withdrawals?
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Old 02-15-2021, 05:45 AM   #16
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Now that my child is in college in Massachusetts, I've had to "tone down" my use of the term "Masshole" when referring to MA drivers. {Mods, all in jest here}

signed, NY resident who lives close to MA and VT borders.
But are they really any worse than the Mainiacs or the New Hamsters? I think it's just a matter of a few bad apples spoiling the reputation of the rest of the barrel.

I've lived all over the US, and everywhere in my experience the drivers from at least one adjoining state have been disparaged like this. It seems to be normal and inevitable.
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PSA: Just found out OH taxes LTCG as ordinary income
Old 02-15-2021, 05:58 AM   #17
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PSA: Just found out OH taxes LTCG as ordinary income

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Originally Posted by teejayevans View Post
What about IRA withdrawals?


No state income tax on regular IRA withdrawals. Any 1099-R with code 7 in Box 7 is not taxed in PA. Code 7D or 4D is taxed as interest, code 4 is not taxed but counts as income when applying for other credits.

PA does not give any deduction for contributions to IRAs or 401Ks.
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Old 02-15-2021, 07:05 AM   #18
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Also in PA, if you can keep your taxable income below 13K as MFJ, it is forgiven if you file PA Schedule SP. Each year I harvest just enough LTCG's to get some 100% tax free income. (All my other income is untaxed in PA)
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Old 02-15-2021, 03:08 PM   #19
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New York uses one's federal return as a starting point for determining state AGI and TI. But I have discovered many differences over the years and continue to find new ones from year to year, including some for 2020.

When I did my 2008 returns, the ones which included the company stock payout, I saw that NY didn't impose that 10% penalty for early withdrawal (before age 59.9) from retirement accounts. I already knew NY taxed all favorably taxed QD and LTCG as ordinary income.

I am doing my 90-yo dad's tax returns this time and have discovered some more differences. Nearly all of his income is not taxable, including SS (even if some of it ends up being federally taxable), his IRA withdrawals, and his small pension. I doubt he has paid any state income tax since he retired in 1994. In fact, he has been building up a LTC Premium tax credit which can be carried over from year to year if not taken in a given year.

For 2020, have any of you fellow New Yorkers notices this new form, IT-558, which adjusts one's already adjusted federal AGI to what they call a "Recomputed federal AGI?" Form IT-558 ignores and federal tax law changes stemming from the 2020 CARES Act such as disallowing cash/check charitable contributions up to $300 claimed by those who filed the standard deduction on their federal returns. So, I have to complete IT-558 to post the $105 I donated to charities, then add it back on the main form (IT-201) to get my "Recomputed federal AGI."
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Old 02-15-2021, 03:17 PM   #20
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Also in PA, if you can keep your taxable income below 13K as MFJ, it is forgiven if you file PA Schedule SP. Each year I harvest just enough LTCG's to get some 100% tax free income. (All my other income is untaxed in PA)


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