Kearney Tax Savings Bill Passes the Senate

Bill will help Ohioans save for the future

Columbus – Senate Bill 194, legislation to boost savings rates among Ohioans was passed out of the Senate today in a unanimous vote. The bill enables anyone filing an Ohio income tax return to have their refund deposited directly into a retirement savings account.

“Senate Bill 194 provides Ohioans with the option of having their tax refund directly deposited into their retirement savings account. This makes saving for retirement easier then ever before by speeding the refund process and making retirement savings part of one’s normal saving routine,” said Senator Eric H. Kearney (D-Cincinnati).

The State of Ohio processes about 4 million tax returns each year with an average refund amount of $310. If just one in four of those filing takes advantage of this option Ohio taxpayers will save $310 million.

In addition to making it easier for Ohioans to save, the plan would also save money for the State. Compared with traditional paper checks, the State of Ohio saves approximately $1.50 for every refund filed electronically. Again, if only on in four tax filers use this option the state will save $1.5 million each year.

“The millions in individual savings and the money saved in state expenses more than justify this legislation,” Kearney said. “In times like these we need to take advantage of every opportunity to conserve state resources and promote individual savings. By making these small administrative changes we can do just that.”

The new option would apply to all income tax returns, regardless of whether they are filed on paper, electronically, or telephonically. The Department of Taxation currently offers the option of direct deposit for a checking or savings account, but Senator Kearney’s plan marks the first time that a refund could be deposited directly into a retirement account. Those interested in taking advantage of the retirement savings option would simply provide their account information on their tax return.

Senator Eric H. Kearney represents parts of Cincinnati, St. Bernard, Elmwood Place, Cleves, Cheviot, Norwood, Golf Manor, Columbia Township, Deer Park, Silverton, Springfield Township, North Bend and Addyston.

Listen to Senator Kearney at the following link:
http://www.box.net/shared/4ph6sho874

To watch floor testimony on SB 194, visit:
http://www.ohiochannel.org/multimedia/organizations/media.cfm?file_id=124370&start_time=2396&organization_id=30
(The Ohio Channel)