If you live in Ohio, get prepared for a individual tax bill in 2010 when you file your 2009 tax return.  Even if you haven’t owed state income tax in past years, your most likely going to own this year.  Here’s why.

Earlier this year, the state of Ohio changed the withholding tables.  This is what your company uses to determine how much to withhold from each of your paychecks.  When I say the stat changed the tables, they lowered what was being withheld.  Why did they do this?  In anticipation of lowering the state income tax rate by year end.

Recently, Governor Stickland, has hinted that because of the state’s budget crisis, the anticipated lower tax rates will most likely not be implemented.  In the state’s mind, this isn’t higher taxes.  It just keeping things were it was.  One big problem with this,  The state lowered what was being taken out of your paycheck.  Whoops!

So, if this all plays out as hinted it will.  You’ll owe Ohio income tax because the rates didn’t get lowered but your withholding to cover that tax did.