NOTE: State laws change frequently and the following information may not reflect recent changes in the laws. For current tax or legal advice, please consult with an accountant or an attorney since the information contained in this article is not tax or legal advice and is not a substitute for tax or legal advice.
On January 1, 2013, Ohio's estate tax was officially repealed. In 2012 and prior years, the estates of Ohio residents, as well as the estates of nonresidents who owned real estate and/or tangible personal property located in Ohio or intangible personal property used in business within Ohio, were subject to a state estate tax under the following guidelines.
When is an Ohio Estate Tax Return Required to be Filed?
Ohio Residents - For an Ohio resident who died in 2012 or prior years, an Ohio Estate Tax Return, ET Form 2, should have been filed if the decedent's gross estate exceeds $338,333.
Nonresidents - For a nonresident of Ohio who died in 2012 and prior years and owned real or personal property located in Ohio or intangible personal property used in business within Ohio, the Ohio estate tax was determined by (1) calculating the tax that would be due from the estate at a rate applicable to resident estates as if the decedent had died a resident of Ohio with all property situated or located in Ohio; and (2) multiplying the resultant amount by a fraction representing the ratio of the gross estate value attributable in Ohio to the gross estate value wherever situated. In addition to filing ET Form 2, nonresident estates must have also filed an Ohio Nonresident Estate Tax Return, ET Form 4.
For both residents and nonresidents, in addition to filing ET Form 2, and, if applicable, ET Form 4, all estates had to file ET Form 5 (Notice of Filing) and ET Form 22 (Certificate of Estate Tax).
When is the Ohio Estate Tax Return and Any Payment Required Due?
Form ET 2 and, if applicable, Form ET 4, should have been filed and any tax due should have been paid within nine months of the decedent's date of death.
All estates were given an automatic six-month extension to file the applicable estate tax forms, however, this did not delay the time for payment of any tax due.
Where is the Ohio Estate Tax Return Filed?
All filings should have been made in duplicate with the probate court where the decedent's estate was being administered. Taxes and interest were paid at the county auditor’s office. Checks were to be made payable to the applicable county treasurer.
What is the Ohio Estate Tax Rate?
A 6% tax rate applied to net estates valued over $338,333 but under $500,000, and a 7% tax rate applied to net estates valued over $500,000.
Are Transfers to a Surviving Spouse Taxable?
Outright transfers to a surviving spouse are not taxable.
For married couples who have used traditional AB Trust planning to reduce their federal estate tax bill, an Ohio estate tax may have been due on the B Trust after the first spouse's death if there was a gap between the Ohio estate tax exemption and the federal estate tax exemption. A married decedent's estate was, however, authorized to make an election on Form ET 2 to treat property as marital deduction qualified terminable interest property ("QTIP") for Ohio purposes, so married Ohio couples could defer payment of both Ohio estate taxes and federal estate taxes until after the death of the surviving spouse by using an ABC Trust scheme instead of AB Trust planning.
When is a Tax Release Required to be Filed?
The tax commissioner does not require an Application for Consent to Transfer Property of a Resident or Nonresident Decedent for assets equal to $25,000 or less per account, and tax releases were not required to be obtained for assets passing solely to a surviving spouse regardless of the dollar amount.
Where Can I Find the Ohio Estate Tax Forms and Additional Information About Ohio Estate Taxes?
For 2012 and past year estate tax forms, refer to the following link to on the Ohio Department of Revenue website: Ohio Estate Tax Forms.
For additional information about Ohio estate taxes, refer to the following link on the Ohio Department of Revenue website: Ohio Estate Taxes - Table of Contents.