On March 5, 2026, Ohio Governor Mike DeWine signed into law Senate Bill 9 (SB 9), which updates Ohio's Internal Revenue Code (IRC) conformity.

SB 9 updates Ohio Rev. Code 5701.11, the state's IRC conformity provision, to the effective date of the legislation — March 5, 2026 — and incorporates recent changes to the IRC taking effect after March 7, 2025 (from March 15, 2023). The incorporated changes include those made by the "One Big Beautiful Bill Act" (OBBBA). The most significant OBBBA provisions affecting Ohio law include allowing a deduction for domestic research and experimental expenses (IRC Section 174A), increasing the cap on deductible business interest  (IRC Section 163(j)) and allowing 100% depreciation of the adjusted basis of qualified production property in the year in which property is placed into service(IRC Section 168(n)).

While Ohio couples to the new bonus depreciation for qualified production property under IRC Section 168(n), it appears that the state continues to decouple from bonus deprecation under IRC Section 168(k) as well as increased IRC Section 179 deduction limits. Taxpayers are required to add-back such amounts claimed for federal income tax purposes and may then gradually deduct these amounts over a period of years on their Ohio return.  (See Ohio Code Sections 5747.01(A)(17) and (18).)  

SB 9 also permits taxpayers with a tax year ending after March 7, 2025 and before March 5, 2026, to irrevocably elect to incorporate all IRC provisions that were effective in their 2025 tax year (2026 tax year for some fiscal-year taxpayers). Taxpayers would make the election on their 2025 tax return (2026 tax return for some fiscal-year taxpayers). The election allows Ohio taxpayers to incorporate the changes made by the OBBBA into their latest return. Similar elections made under prior versions of Ohio Rev. Code 5701.11 remain in effect for the tax years to which those elections applied.

SB 9 takes immediate effect.

Implications

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.