March 8, 2023
Ohio revisits Internal Revenue Code conformity
On March 1, 2023, the Ohio General Assembly passed Senate Bill 10 (SB 10), which would update Ohio's Internal Revenue Code (IRC) conformity. Governor Mike DeWine is expected to sign SB 10 in the coming days, with the legislation having immediate effect.
Ohio Rev. Code 5701.11 is Ohio's IRC conformity provision and is typically updated annually. SB 10 would update Ohio's IRC conformity to the effective date of the legislation.
SB 10 also would update a provision allowing a taxpayer, whose tax year ends after February 17, 2022, to irrevocably elect to incorporate IRC provisions that were in effect for that tax year. The election would allow taxpayers to incorporate provisions from two federal laws enacted in 2022. The first is the Inflation Reduction Act of 2022 (P.L. 117-169), which:
The second is the Consolidated Appropriations Act, 2023 (P.L.117-328), which made the following changes to the tax treatment of certain retirement distributions and contributions:
Taxpayers would make this election by filing the Ohio income tax return, which incorporates those IRC provisions. Similar elections made under prior versions of Ohio Rev. Code 5701.11 remain effective for the tax years to which those elections applied.
SB 10 has been declared an emergency measure so that taxpayers can avoid having to adjust their 2022 income tax returns. The legislation will take immediate effect upon Governor DeWine's signature.
Published by NTD’s Tax Technical Knowledge Services group; Jennifer A Brittenham, legal editor