As Introduced
135th General Assembly
Regular Session H. B. No. 654
2023-2024
Representative Click
Cosponsors: Representatives Dean, Gross, King, Klopfenstein, Lear, Wiggam,
Williams
A BILL
To amend sections 5747.01 and 5747.025 of the 1
Revised Code to authorize a personal income tax 2
exemption and credit for conceived children and 3
to name this act the Strategic Tax Opportunities 4
for Raising Kids (STORK) Act. 5
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 5747.01 and 5747.025 of the 6
Revised Code be amended to read as follows: 7
Sec. 5747.01. Except as otherwise expressly provided or 8
clearly appearing from the context, any term used in this 9
chapter that is not otherwise defined in this section has the 10
same meaning as when used in a comparable context in the laws of 11
the United States relating to federal income taxes or if not 12
used in a comparable context in those laws, has the same meaning 13
as in section 5733.40 of the Revised Code. Any reference in this 14
chapter to the Internal Revenue Code includes other laws of the 15
United States relating to federal income taxes. 16
As used in this chapter: 17
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As Introduced
(A) "Adjusted gross income" or "Ohio adjusted gross 18
income" means federal adjusted gross income, as defined and used 19
in the Internal Revenue Code, adjusted as provided in this 20
section: 21
(1) Add interest or dividends on obligations or securities 22
of any state or of any political subdivision or authority of any 23
state, other than this state and its subdivisions and 24
authorities. 25
(2) Add interest or dividends on obligations of any 26
authority, commission, instrumentality, territory, or possession 27
of the United States to the extent that the interest or 28
dividends are exempt from federal income taxes but not from 29
state income taxes. 30
(3) Deduct interest or dividends on obligations of the 31
United States and its territories and possessions or of any 32
authority, commission, or instrumentality of the United States 33
to the extent that the interest or dividends are included in 34
federal adjusted gross income but exempt from state income taxes 35
under the laws of the United States. 36
(4) Deduct disability and survivor's benefits to the 37
extent included in federal adjusted gross income. 38
(5) Deduct the following, to the extent not otherwise 39
deducted or excluded in computing federal or Ohio adjusted gross 40
income: 41
(a) Benefits under Title II of the Social Security Act and 42
tier 1 railroad retirement; 43
(b) Railroad retirement benefits, other than tier 1 44
railroad retirement benefits, to the extent such amounts are 45
exempt from state taxation under federal law. 46
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As Introduced
(6) Deduct the amount of wages and salaries, if any, not 47
otherwise allowable as a deduction but that would have been 48
allowable as a deduction in computing federal adjusted gross 49
income for the taxable year, had the work opportunity tax credit 50
allowed and determined under sections 38, 51, and 52 of the 51
Internal Revenue Code not been in effect. 52
(7) Deduct any interest or interest equivalent on public 53
obligations and purchase obligations to the extent that the 54
interest or interest equivalent is included in federal adjusted 55
gross income. 56
(8) Add any loss or deduct any gain resulting from the 57
sale, exchange, or other disposition of public obligations to 58
the extent that the loss has been deducted or the gain has been 59
included in computing federal adjusted gross income. 60
(9) Deduct or add amounts, as provided under section 61
5747.70 of the Revised Code, related to contributions made to or 62
tuition units purchased under a qualified tuition program 63
established pursuant to section 529 of the Internal Revenue 64
Code. 65
(10)(a) Deduct, to the extent not otherwise allowable as a 66
deduction or exclusion in computing federal or Ohio adjusted 67
gross income for the taxable year, the amount the taxpayer paid 68
during the taxable year for medical care insurance and qualified 69
long-term care insurance for the taxpayer, the taxpayer's 70
spouse, and dependents. No deduction for medical care insurance 71
under division (A)(10)(a) of this section shall be allowed 72
either to any taxpayer who is eligible to participate in any 73
subsidized health plan maintained by any employer of the 74
taxpayer or of the taxpayer's spouse, or to any taxpayer who is 75
entitled to, or on application would be entitled to, benefits 76
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As Introduced
under part A of Title XVIII of the "Social Security Act," 49 77
Stat. 620 (1935), 42 U.S.C. 301, as amended. For the purposes of 78
division (A)(10)(a) of this section, "subsidized health plan" 79
means a health plan for which the employer pays any portion of 80
the plan's cost. The deduction allowed under division (A)(10)(a) 81
of this section shall be the net of any related premium refunds, 82
related premium reimbursements, or related insurance premium 83
dividends received during the taxable year. 84
(b) Deduct, to the extent not otherwise deducted or 85
excluded in computing federal or Ohio adjusted gross income 86
during the taxable year, the amount the taxpayer paid during the 87
taxable year, not compensated for by any insurance or otherwise, 88
for medical care of the taxpayer, the taxpayer's spouse, and 89
dependents, to the extent the expenses exceed seven and one-half 90
per cent of the taxpayer's federal adjusted gross income. 91
(c) For purposes of division (A)(10) of this section, 92
"medical care" has the meaning given in section 213 of the 93
Internal Revenue Code, subject to the special rules, 94
limitations, and exclusions set forth therein, and "qualified 95
long-term care" has the same meaning given in section 7702B(c) 96
of the Internal Revenue Code. Solely for purposes of division 97
(A)(10)(a) of this section, "dependent" includes a person who 98
otherwise would be a "qualifying relative" and thus a 99
"dependent" under section 152 of the Internal Revenue Code but 100
for the fact that the person fails to meet the income and 101
support limitations under section 152(d)(1)(B) and (C) of the 102
Internal Revenue Code. 103
(11)(a) Deduct any amount included in federal adjusted 104
gross income solely because the amount represents a 105
reimbursement or refund of expenses that in any year the 106
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As Introduced
taxpayer had deducted as an itemized deduction pursuant to 107
section 63 of the Internal Revenue Code and applicable United 108
States department of the treasury regulations. The deduction 109
otherwise allowed under division (A)(11)(a) of this section 110
shall be reduced to the extent the reimbursement is attributable 111
to an amount the taxpayer deducted under this section in any 112
taxable year. 113
(b) Add any amount not otherwise included in Ohio adjusted 114
gross income for any taxable year to the extent that the amount 115
is attributable to the recovery during the taxable year of any 116
amount deducted or excluded in computing federal or Ohio 117
adjusted gross income in any taxable year. 118
(12) Deduct any portion of the deduction described in 119
section 1341(a)(2) of the Internal Revenue Code, for repaying 120
previously reported income received under a claim of right, that 121
meets both of the following requirements: 122
(a) It is allowable for repayment of an item that was 123
included in the taxpayer's adjusted gross income for a prior 124
taxable year and did not qualify for a credit under division (A) 125
or (B) of section 5747.05 of the Revised Code for that year; 126
(b) It does not otherwise reduce the taxpayer's adjusted 127
gross income for the current or any other taxable year. 128
(13) Deduct an amount equal to the deposits made to, and 129
net investment earnings of, a medical savings account during the 130
taxable year, in accordance with section 3924.66 of the Revised 131
Code. The deduction allowed by division (A)(13) of this section 132
does not apply to medical savings account deposits and earnings 133
otherwise deducted or excluded for the current or any other 134
taxable year from the taxpayer's federal adjusted gross income. 135
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As Introduced
(14)(a) Add an amount equal to the funds withdrawn from a 136
medical savings account during the taxable year, and the net 137
investment earnings on those funds, when the funds withdrawn 138
were used for any purpose other than to reimburse an account 139
holder for, or to pay, eligible medical expenses, in accordance 140
with section 3924.66 of the Revised Code; 141
(b) Add the amounts distributed from a medical savings 142
account under division (A)(2) of section 3924.68 of the Revised 143
Code during the taxable year. 144
(15) Add any amount claimed as a credit under section 145
5747.059 of the Revised Code to the extent that such amount 146
satisfies either of the following: 147
(a) The amount was deducted or excluded from the 148
computation of the taxpayer's federal adjusted gross income as 149
required to be reported for the taxpayer's taxable year under 150
the Internal Revenue Code; 151
(b) The amount resulted in a reduction of the taxpayer's 152
federal adjusted gross income as required to be reported for any 153
of the taxpayer's taxable years under the Internal Revenue Code. 154
(16) Deduct the amount contributed by the taxpayer to an 155
individual development account program established by a county 156
department of job and family services pursuant to sections 157
329.11 to 329.14 of the Revised Code for the purpose of matching 158
funds deposited by program participants. On request of the tax 159
commissioner, the taxpayer shall provide any information that, 160
in the tax commissioner's opinion, is necessary to establish the 161
amount deducted under division (A)(16) of this section. 162
(17)(a)(i) Subject to divisions (A)(17)(a)(iii), (iv), and 163
(v) of this section, add five-sixths of the amount of 164
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As Introduced
depreciation expense allowed by subsection (k) of section 168 of 165
the Internal Revenue Code, including the taxpayer's 166
proportionate or distributive share of the amount of 167
depreciation expense allowed by that subsection to a pass- 168
through entity in which the taxpayer has a direct or indirect 169
ownership interest. 170
(ii) Subject to divisions (A)(17)(a)(iii), (iv), and (v) 171
of this section, add five-sixths of the amount of qualifying 172
section 179 depreciation expense, including the taxpayer's 173
proportionate or distributive share of the amount of qualifying 174
section 179 depreciation expense allowed to any pass-through 175
entity in which the taxpayer has a direct or indirect ownership 176
interest. 177
(iii) Subject to division (A)(17)(a)(v) of this section, 178
for taxable years beginning in 2012 or thereafter, if the 179
increase in income taxes withheld by the taxpayer is equal to or 180
greater than ten per cent of income taxes withheld by the 181
taxpayer during the taxpayer's immediately preceding taxable 182
year, "two-thirds" shall be substituted for "five-sixths" for 183
the purpose of divisions (A)(17)(a)(i) and (ii) of this section. 184
(iv) Subject to division (A)(17)(a)(v) of this section, 185
for taxable years beginning in 2012 or thereafter, a taxpayer is 186
not required to add an amount under division (A)(17) of this 187
section if the increase in income taxes withheld by the taxpayer 188
and by any pass-through entity in which the taxpayer has a 189
direct or indirect ownership interest is equal to or greater 190
than the sum of (I) the amount of qualifying section 179 191
depreciation expense and (II) the amount of depreciation expense 192
allowed to the taxpayer by subsection (k) of section 168 of the 193
Internal Revenue Code, and including the taxpayer's 194
H. B. No. 654 Page 8
As Introduced
proportionate or distributive shares of such amounts allowed to 195
any such pass-through entities. 196
(v) If a taxpayer directly or indirectly incurs a net 197
operating loss for the taxable year for federal income tax 198
purposes, to the extent such loss resulted from depreciation 199
expense allowed by subsection (k) of section 168 of the Internal 200
Revenue Code and by qualifying section 179 depreciation expense, 201
"the entire" shall be substituted for "five-sixths of the" for 202
the purpose of divisions (A)(17)(a)(i) and (ii) of this section. 203
The tax commissioner, under procedures established by the 204
commissioner, may waive the add-backs related to a pass-through 205
entity if the taxpayer owns, directly or indirectly, less than 206
five per cent of the pass-through entity. 207
(b) Nothing in division (A)(17) of this section shall be 208
construed to adjust or modify the adjusted basis of any asset. 209
(c) To the extent the add-back required under division (A) 210
(17)(a) of this section is attributable to property generating 211
nonbusiness income or loss allocated under section 5747.20 of 212
the Revised Code, the add-back shall be sitused to the same 213
location as the nonbusiness income or loss generated by the 214
property for the purpose of determining the credit under 215
division (A) of section 5747.05 of the Revised Code. Otherwise, 216
the add-back shall be apportioned, subject to one or more of the 217
four alternative methods of apportionment enumerated