Governor Dewine laid out a family-focused plan in his 2023 State of the State address in January. Among those proposals is a $2,500 tax deduction for people with kids. While the details of the budget will still need to be passed through the legislature, Governor Dewine believes that the $2,500 deduction is an important component of focusing on families and children.

Tax Plan Explained

A tax deduction is different from tax credits, such as the federal Child Tax Credit. A child tax deduction would be deducted from a person’s taxable income, which affects the amount a person owes instead of being taken out of the taxes a person owes. This means that a tax deduction has a lower financial benefit.

According to the Columbus Dispatch, families with two children earning $100,000 would save at most $184. That same family would get $5,000 off their tax bill with a credit.

A single parent of one child who makes $40,000 would save about $69.

Critics of the proposal have said the benefit doesn’t go far enough because it doesn’t help those that need it most since Ohioans who make under $26,050 don’t pay income taxes, so wouldn’t see any financial relief. Policy Matters Ohio states, “Gov. DeWine’s proposal is an expensive, poorly designed policy that will have no impact on families who most need support and will provide only modest benefits to most others.”

Look for Changes from the State Legislature

Many items in the budget are subject to change, of course. House Republicans are exploring options for a flat tax rate for all Ohioans. The House is currently reviewing the budget and then the Senate will begin work in April. 

In a statement to the Columbus Dispatch, State Sen. Matt Dolan, R-Chagrin Falls and Rep. Jay Edwards, R-Nelsonville, who chairs the House Finance Committee, said they appreciate the spirit of DeWine’s proposal and want to find ways to help parents. But it’s unclear what the final version will look like, and Edwards wants to ensure any deduction affects all families in Ohio.