OHIO LEGISLATIVE SERVICE COMMISSION
Office of Research Legislative Budget
www.lsc.ohio.gov and Drafting Office
H.B. 645 Bill Analysis
135th General Assembly
Click here for H.B. 645’s Fiscal Note
Version: As Introduced
Primary Sponsors: Reps. Isaacsohn and Hall
Effective date:
Mackenzie Damon, Attorney
SUMMARY
▪ Authorizes a property tax circuit breaker for eligible homeowners and renters whose
property taxes, or portion of rent attributable to property taxes, exceeds 5% of their
income.
▪ Allows individuals to claim the circuit breaker benefit either as a refundable income tax
credit or as a direct rebate.
▪ Limits the credit or rebate to individuals whose household income does not exceed
$100,000, with that limit subject to inflation adjustments in later years.
▪ Further limits the credit or rebate to homes whose value does not exceed a certain
median home value ($438,300 for 2022) and rental units with a monthly rent under a
specified median monthly rent ($1,370 for 2022).
▪ Caps the credit or rebate at between $200 to $1,000 per year, depending on the
applicant’s household income, with those limits subject to inflation adjustments in later
years.
DETAILED ANALYSIS
Property tax circuit breaker
The bill authorizes payments for homeowners and renters whose property tax burden
exceeds 5% of their income. The program, known as a “property tax circuit breaker,” is available
as a refundable income tax credit, for individuals who file a state income tax return, or as a direct
rebate, for individuals who do not.
November 25, 2024
Office of Research and Drafting LSC Legislative Budget Office
Qualifying homeowners and renters
To qualify for the circuit breaker, an individual must meet occupancy and income
requirements. In addition, the value of the individual’s home, or the individual’s monthly rent,
cannot exceed a certain threshold.
First, the individual must have occupied the homestead for which the benefit is claimed
for at least six months. A homestead is any dwelling occupied as a primary residence, including
mobile or manufactured homes and units in multi-family buildings. Only one person can claim
the benefit per homestead.
Second, for homeowners, the value of the individual’s home cannot exceed the median
home value in the Ohio county with the highest median home value according to the most recent
census data. For 2022, that threshold was $438,300.1 Similarly, for renters, the individual’s
monthly rent cannot exceed the median rent in the Ohio county with the highest median rent.
For 2022, that amount was $1,370. The Tax Commissioner will publish updated limits each year
based on the most recent census data.
Third, an individual’s “total household resources” must fall below a specific threshold. For
the first year the bill applies, that limit is $100,000. In each following year, the Tax Commissioner
will increase that limit for inflation, i.e., the increase in the federal Gross Domestic Product
Deflator.2
Total household resources
The household income limit generally applies to the total income received by an individual
and the individual’s spouse for the claim year, with some adjustments.3 The household’s total
resources equals the individual’s and spouse’s federal adjustment gross income (FAGI), plus any
income that is specifically excluded or exempt from FAGI, and further increased by any deduction
from federal gross income for (1) business net operating losses (NOLs), (2) net rental or royalty
losses, or (3) NOL carrybacks or carryforwards.
From that total income, the household may subtract income from the following sources:
Subtractions from gross household resources
Up to $300 of gifts from Up to $300 of lottery, casino, State or municipal tax
nongovernmental sources or sports gaming winnings refunds or tax credits
1 In both cases, for 2022, the county with the highest values was Delaware County. Data sets for both
values can be accessed at data.census.gov. Enter keyword search “median home value” or “median gross
rent (dollars),” respectively, and filter the results for “Ohio” and “All counties in Ohio.”
2 R.C. 5747.08, 5747.86, and 5747.98.
3 R.C. 5747.86(A)(6) and (9).
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As Introduced
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Subtractions from gross household resources
Government payments made Supplemental Nutrition Government grants that must
to a third party on the Assistance Program (SNAP) be used for home
individual’s behalf benefits rehabilitation
Stipends paid to participants Amounts deducted from Contributions by an employer
in the foster grandparent or Social Security or Railroad to life, accident, or health
senior companion programs Retirement benefits for insurance plans
Medicare premiums
Energy assistance payments Loan proceeds Inheritance or life insurance
for low-income customers benefits from a spouse
Accident or health insurance Payments from a long-term Compensation for wrongful
plan premiums paid by an care policy made to a nursing imprisonment
employer home
Benefit amount
In general, the benefit available to an individual equals the amount by which the
individual’s property tax burden exceeds 5% of the individual’s household resources, up to a
specified benefit limit that varies based upon the individual’s household resources. For the first
year the bill applies, the limit starts at $1,000 for individuals with household resources of $60,000
or less, and decreases by $200 for each $10,000 increase in household resources, so that
individuals with household resources of $90,000 - $100,000 are limited to a $200 credit or rebate.
In each later year, the income limits and the maximum credit limits will increase for inflation.4
Benefit calculation for homeowners
For homeowners, the benefit equals the amount by which the homeowner’s property
taxes for the most recent tax year, excluding delinquent taxes, penalties, interest, and special
assessments, exceeds 5% of their total household resources.
Example: Bill has total household resources of $50,000 and a property tax liability of
$3,000. Five percent of Bill’s income would be $2,500. So, his benefit would equal $500 ($3,000
minus $2,500).
Benefit calculation for renters
For renters, the benefit equals the amount by which the portion of the individual’s rent
that is attributable to property taxes exceeds 5% of the individual’s total household resources.
Under the bill, it assumed that 15% of an individual’s gross rent is attributable to property taxes.
The bill refers to this amount as the “rent-equivalent tax.” An individual’s “gross rent” is the total
rent paid pursuant to an arm’s length transaction with a landlord.
4 R.C. 5747.86(B) and (C).
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As Introduced
Office of Research and Drafting LSC Legislative Budget Office
Example: Bonnie has total household resources of $50,000 and pays rent of $1,500 per
month, or $18,000 per year. The portion of that rent attributable to taxes equals $2,700 (15% of
$18,000). Subtracting 5% of Bonnie’s income, or $2,500, results in a benefit of $200.
Claim procedure
If an individual files an Ohio income tax return, the individual must claim the benefit as a
tax credit on the return. If the amount of the tax credit exceeds the individual’s tax liability, the
individual will receive a refund equal to the difference.5
The Department of Taxation must create a separate application for individuals who are
not required to file an income tax return. These applications are generally due on the same date
as the standard filing deadline for income tax returns (typically April 15), although an individual
may request an extension in a similar manner as income tax return extensions, i.e., typically to
October 15.6
The benefit is based on the property taxes or rent-equivalent tax payable in the year in
which the tax return or application is filed. For example, an individual will file an Ohio income tax
return for their 2023 taxable year between January and April of 2024. On that return, the
individual’s circuit breaker credit will be based on property taxes charged for tax year 2023, which
– since property taxes are paid one year in arrears – are payable in 2024. A renter’s 2024 benefit
is based on the rent-equivalent tax paid by the renter in 2023.
Adjustment due to change in tax liability
If the amount of property taxes ultimately paid for a tax year differs from the property
tax amount used to calculate a credit or rebate allowed under the bill, the recipient must report
the difference on the following year’s income tax return or rebate application. The recipient must
adjust the recipient’s credit or rebate for the following year to account for the difference.
Alternatively, if the individual no longer qualifies for a credit or rebate in that year, the individual
must pay or request a refund of the difference.7
Application
The bill applies to the first tax year ending on or after the bill’s 90-day effective date.
For example, if the bill takes effect in 2024, individuals could claim the payment in 2025 based
on their tax year 2024 taxes.8
5 R.C. 5747.86(D).
6 R.C. 5747.86(E).
7 R.C. 5747.86(H).
8 Section 3.
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As Introduced
Office of Research and Drafting LSC Legislative Budget Office
HISTORY
Action Date
Introduced 07-29-24
ANHB0645IN-135/ar
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As Introduced


Statutes affected:
As Introduced: 5747.08, 5747.98