Ohio’s Opportunity Zone Credit Application Opens July 10
With the Ohio Opportunity Zone (OZ) Credit application timeline upon us, it is crucial to understand the rules and benefits of the program. Ohio offers a tax credit equal to 10% of the taxpayer’s investment in the Opportunity Fund, up to a maximum of $2 million per biennium, per taxpayer.
To be eligible for the Ohio OZ Credit, the funds invested in the Ohio Qualified Opportunity Fund do not need to be from capital gains, which is a requirement for Federal OZ benefits. Taxpayers can receive Ohio OZ credits even if they do not qualify for Federal OZ benefits.
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Taxpayers who receive the Ohio OZ credit can use it 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 over the following five years.
One of the significant benefits of the Ohio OZ program is that credits can be monetized by the taxpayer. Taxpayers can sell all or part of the Ohio OZ credit an infinite number of times with written notice to the Ohio Department of Taxation.
Ohio OZ Credits Expected To Be Allocated In July
Taxpayers are required to apply for the Ohio OZ credit during one of the two application periods, depending on when the Qualified Opportunity Fund makes an investment in a Qualified Opportunity Zone Property. For investments made between Jan. 1 and June 30, taxpayers can apply for the credit between July 10 and Aug. 1. For investments made between July 1 and Dec. 31, taxpayers can apply for the credit between Jan. 10 and Feb. 1 of the following year.
Applications are reviewed and approved in the order they are received. However, the total amount of credits issued is capped at $25 million for the current year. Similar to last year, it is expected that the entire $25 million in credits will be allocated in the first round of applications in July. If this happens, the state will not hold the next round in January 2026.
Learn More
For more information about the Ohio Opportunity Zones Tax Credit Program, please visit the Ohio Department of Development website or contact us for additional information.
By Azra Nakicevic, CPA, Tax & Business Advisory Services
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