Earlier this year, Ohio passed its 2022-2023 operating budget. The legislation not only renewed the Ohio Opportunity Zone (OZ) Tax Credit, retaining the previous fiscal biennium limit of $50 million in tax credits to be issued, but it also doubled the amount a single application can claim — now up to $2 million.
The renewal of the Ohio OZ tax credit will follow the same program guidelines as in previous years. Below is a refresher on those guidelines.
The credit offers tax incentives for eligible investments in qualified projects located in Ohio OZs as designated by Federal Statute 26 U.S.C. 1400Z-1.
A taxpayer invests cash in an Ohio Qualified Opportunity Fund (QOF), which in turn must invest that money in Qualified Opportunity Zone (QOZ) property located in an Ohio OZ. Once the money is invested, the taxpayer is eligible for a non-refundable tax credit equal to 10% of the amount of its funds invested by the Ohio QOF in the QOZ property.
The Ohio OZ Tax Credit may be claimed for the taxpayer’s qualifying taxable year or the next consecutive taxable year.
To qualify for the credit, the following requirements must be met:
The Ohio QOF must:
If you are invested in an Ohio QOF and that fund invested in Ohio QOZ property during the 2021 calendar year, you must do the following two things to qualify for the 2022 round of tax credits:
The Ohio Development Services Agency will review the applications in the order they are received, issuing tax credit certificate allocations until all eligible applications are funded OR the $50 million in tax credits is fully used — whichever comes first.
If you have invested, or are considering investing in Ohio OZs, apply as early as possible to take advantage of this additional tax savings opportunity.
Contact Angel Rice at firstname.lastname@example.org or a member of your service team to discuss this topic further.
Cohen & Company is not rendering legal, accounting or other professional advice. Information contained in this post is considered accurate as of the date of publishing. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts, circumstances and current law.
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