April 29, 2024

Unlocking financial opportunities while navigating the intricacies of tax incentives demands a strategic approach, particularly in the realm of the Ohio Opportunity Zone Tax Credit Program. With the application deadline approaching, it’s important to grasp this program’s detailed rules and benefits.

  • Ohio provides a 10% tax credit equal to 10% of the taxpayer’s investment in the Opportunity Fund (OZ) (up to the $2 million maximum per biennium, per taxpayer).
  • For the taxpayer to be eligible for credit, the funds invested in the Ohio Qualified Opportunity Fund (QOF) do not have to be from capital gains, which is the requirement for federal OZ benefits. Taxpayers can receive Ohio OZ credits even if they do not qualify for federal OZ benefits.
  • Taxpayers who receive Ohio OZ credits can use them to offset their Ohio income tax in the year the credit is received. Any unused tax credit amount can be carried forward and utilized by the taxpayer in the following five years.
  • One of the benefits of the Ohio OZ program is that the taxpayer can monetize credits. With changes made a few years ago, taxpayers can now sell all or part of the OZ credit an infinite number of times with written notice to the Ohio Department of Taxation.
  • Taxpayers must apply for the Ohio OZ credit using one of the two application periods, depending on when the QOF invests in a QOZ property. For investments that are made between January 1 and June 30, taxpayers can apply for the credit between July 10 and August 1. For investments that are made between July 1 and December 31, taxpayers can apply for the credit between January 10 and February 1 of the following year.
  • Applications are reviewed and approved in the order in which they are received, but the total amount of credits issued is capped at $50 million for fiscal year 2024 and $25 million for each fiscal year thereafter. Given the competitive nature of the program, it is generally advisable to apply for the credit as soon as the application window opens.

For a deeper dive into this tax program, explore the resources offered by the Ohio Department of Development or contact your GBQ advisor.

 

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