The Ohio General Assembly on February 19, 2025, passed House Bill 14 (HB 14), which would update Ohio's Internal Revenue Code (IRC) conformity. Governor Mike DeWine is expected to sign HB 14 into law, with immediate effect.

HB 14 would update Ohio Rev. Code 5701.11, the state's IRC conformity provision, to the effective date of the legislation and would incorporate recent changes to the IRC taking effect after March 15, 2023 (from February 17, 2022). The incorporated changes include those made by the Federal Disaster Tax Relief Act of 2023 (FDTRA). The most significant FDTRA provision affecting Ohio law involves the tax treatment of certain relief payments. Specifically, the FDTRA excludes from a taxpayer's gross income qualified disaster relief payments for losses resulting from the East Palestine train derailment on February 3, 2023.

HB 14 would also update a provision allowing a taxpayer, whose tax year ends after March 15, 2023, to irrevocably elect to incorporate IRC provisions that were in effect for that tax year. 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 in effect for the tax years to which those elections applied.

Implications

HB 14 has been declared an emergency measure so that taxpayers can avoid having to adjust their 2024 income tax returns. The legislation will take immediate effect upon Governor DeWine's signature. Taxpayers should be aware of the changes and consider how the updated IRC conformity may impact their tax liabilities and reporting requirements for the upcoming tax year.