As Introduced
135th General Assembly
Regular Session H. B. No. 685
2023-2024
Representatives Fischer, Santucci
Cosponsors: Representatives Ferguson, Lear, Lorenz, Plummer, Williams, Willis,
King, Barhorst, Creech, Swearingen, Gross
A BILL
To amend section 5747.01 of the Revised Code to 1
allow a state income tax deduction for overtime 2
wages. 3
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That section 5747.01 of the Revised Code be 4
amended to read as follows: 5
Sec. 5747.01. Except as otherwise expressly provided or 6
clearly appearing from the context, any term used in this 7
chapter that is not otherwise defined in this section has the 8
same meaning as when used in a comparable context in the laws of 9
the United States relating to federal income taxes or if not 10
used in a comparable context in those laws, has the same meaning 11
as in section 5733.40 of the Revised Code. Any reference in this 12
chapter to the Internal Revenue Code includes other laws of the 13
United States relating to federal income taxes. 14
As used in this chapter: 15
(A) "Adjusted gross income" or "Ohio adjusted gross 16
income" means federal adjusted gross income, as defined and used 17
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As Introduced
in the Internal Revenue Code, adjusted as provided in this 18
section: 19
(1) Add interest or dividends on obligations or securities 20
of any state or of any political subdivision or authority of any 21
state, other than this state and its subdivisions and 22
authorities. 23
(2) Add interest or dividends on obligations of any 24
authority, commission, instrumentality, territory, or possession 25
of the United States to the extent that the interest or 26
dividends are exempt from federal income taxes but not from 27
state income taxes. 28
(3) Deduct interest or dividends on obligations of the 29
United States and its territories and possessions or of any 30
authority, commission, or instrumentality of the United States 31
to the extent that the interest or dividends are included in 32
federal adjusted gross income but exempt from state income taxes 33
under the laws of the United States. 34
(4) Deduct disability and survivor's benefits to the 35
extent included in federal adjusted gross income. 36
(5) Deduct the following, to the extent not otherwise 37
deducted or excluded in computing federal or Ohio adjusted gross 38
income: 39
(a) Benefits under Title II of the Social Security Act and 40
tier 1 railroad retirement; 41
(b) Railroad retirement benefits, other than tier 1 42
railroad retirement benefits, to the extent such amounts are 43
exempt from state taxation under federal law. 44
(6) Deduct the amount of wages and salaries, if any, not 45
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As Introduced
otherwise allowable as a deduction but that would have been 46
allowable as a deduction in computing federal adjusted gross 47
income for the taxable year, had the work opportunity tax credit 48
allowed and determined under sections 38, 51, and 52 of the 49
Internal Revenue Code not been in effect. 50
(7) Deduct any interest or interest equivalent on public 51
obligations and purchase obligations to the extent that the 52
interest or interest equivalent is included in federal adjusted 53
gross income. 54
(8) Add any loss or deduct any gain resulting from the 55
sale, exchange, or other disposition of public obligations to 56
the extent that the loss has been deducted or the gain has been 57
included in computing federal adjusted gross income. 58
(9) Deduct or add amounts, as provided under section 59
5747.70 of the Revised Code, related to contributions made to or 60
tuition units purchased under a qualified tuition program 61
established pursuant to section 529 of the Internal Revenue 62
Code. 63
(10)(a) Deduct, to the extent not otherwise allowable as a 64
deduction or exclusion in computing federal or Ohio adjusted 65
gross income for the taxable year, the amount the taxpayer paid 66
during the taxable year for medical care insurance and qualified 67
long-term care insurance for the taxpayer, the taxpayer's 68
spouse, and dependents. No deduction for medical care insurance 69
under division (A)(10)(a) of this section shall be allowed 70
either to any taxpayer who is eligible to participate in any 71
subsidized health plan maintained by any employer of the 72
taxpayer or of the taxpayer's spouse, or to any taxpayer who is 73
entitled to, or on application would be entitled to, benefits 74
under part A of Title XVIII of the "Social Security Act," 49 75
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As Introduced
Stat. 620 (1935), 42 U.S.C. 301, as amended. For the purposes of 76
division (A)(10)(a) of this section, "subsidized health plan" 77
means a health plan for which the employer pays any portion of 78
the plan's cost. The deduction allowed under division (A)(10)(a) 79
of this section shall be the net of any related premium refunds, 80
related premium reimbursements, or related insurance premium 81
dividends received during the taxable year. 82
(b) Deduct, to the extent not otherwise deducted or 83
excluded in computing federal or Ohio adjusted gross income 84
during the taxable year, the amount the taxpayer paid during the 85
taxable year, not compensated for by any insurance or otherwise, 86
for medical care of the taxpayer, the taxpayer's spouse, and 87
dependents, to the extent the expenses exceed seven and one-half 88
per cent of the taxpayer's federal adjusted gross income. 89
(c) For purposes of division (A)(10) of this section, 90
"medical care" has the meaning given in section 213 of the 91
Internal Revenue Code, subject to the special rules, 92
limitations, and exclusions set forth therein, and "qualified 93
long-term care" has the same meaning given in section 7702B(c) 94
of the Internal Revenue Code. Solely for purposes of division 95
(A)(10)(a) of this section, "dependent" includes a person who 96
otherwise would be a "qualifying relative" and thus a 97
"dependent" under section 152 of the Internal Revenue Code but 98
for the fact that the person fails to meet the income and 99
support limitations under section 152(d)(1)(B) and (C) of the 100
Internal Revenue Code. 101
(11)(a) Deduct any amount included in federal adjusted 102
gross income solely because the amount represents a 103
reimbursement or refund of expenses that in any year the 104
taxpayer had deducted as an itemized deduction pursuant to 105
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As Introduced
section 63 of the Internal Revenue Code and applicable United 106
States department of the treasury regulations. The deduction 107
otherwise allowed under division (A)(11)(a) of this section 108
shall be reduced to the extent the reimbursement is attributable 109
to an amount the taxpayer deducted under this section in any 110
taxable year. 111
(b) Add any amount not otherwise included in Ohio adjusted 112
gross income for any taxable year to the extent that the amount 113
is attributable to the recovery during the taxable year of any 114
amount deducted or excluded in computing federal or Ohio 115
adjusted gross income in any taxable year. 116
(12) Deduct any portion of the deduction described in 117
section 1341(a)(2) of the Internal Revenue Code, for repaying 118
previously reported income received under a claim of right, that 119
meets both of the following requirements: 120
(a) It is allowable for repayment of an item that was 121
included in the taxpayer's adjusted gross income for a prior 122
taxable year and did not qualify for a credit under division (A) 123
or (B) of section 5747.05 of the Revised Code for that year; 124
(b) It does not otherwise reduce the taxpayer's adjusted 125
gross income for the current or any other taxable year. 126
(13) Deduct an amount equal to the deposits made to, and 127
net investment earnings of, a medical savings account during the 128
taxable year, in accordance with section 3924.66 of the Revised 129
Code. The deduction allowed by division (A)(13) of this section 130
does not apply to medical savings account deposits and earnings 131
otherwise deducted or excluded for the current or any other 132
taxable year from the taxpayer's federal adjusted gross income. 133
(14)(a) Add an amount equal to the funds withdrawn from a 134
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As Introduced
medical savings account during the taxable year, and the net 135
investment earnings on those funds, when the funds withdrawn 136
were used for any purpose other than to reimburse an account 137
holder for, or to pay, eligible medical expenses, in accordance 138
with section 3924.66 of the Revised Code; 139
(b) Add the amounts distributed from a medical savings 140
account under division (A)(2) of section 3924.68 of the Revised 141
Code during the taxable year. 142
(15) Add any amount claimed as a credit under section 143
5747.059 of the Revised Code to the extent that such amount 144
satisfies either of the following: 145
(a) The amount was deducted or excluded from the 146
computation of the taxpayer's federal adjusted gross income as 147
required to be reported for the taxpayer's taxable year under 148
the Internal Revenue Code; 149
(b) The amount resulted in a reduction of the taxpayer's 150
federal adjusted gross income as required to be reported for any 151
of the taxpayer's taxable years under the Internal Revenue Code. 152
(16) Deduct the amount contributed by the taxpayer to an 153
individual development account program established by a county 154
department of job and family services pursuant to sections 155
329.11 to 329.14 of the Revised Code for the purpose of matching 156
funds deposited by program participants. On request of the tax 157
commissioner, the taxpayer shall provide any information that, 158
in the tax commissioner's opinion, is necessary to establish the 159
amount deducted under division (A)(16) of this section. 160
(17)(a)(i) Subject to divisions (A)(17)(a)(iii), (iv), and 161
(v) of this section, add five-sixths of the amount of 162
depreciation expense allowed by subsection (k) of section 168 of 163
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As Introduced
the Internal Revenue Code, including the taxpayer's 164
proportionate or distributive share of the amount of 165
depreciation expense allowed by that subsection to a pass- 166
through entity in which the taxpayer has a direct or indirect 167
ownership interest. 168
(ii) Subject to divisions (A)(17)(a)(iii), (iv), and (v) 169
of this section, add five-sixths of the amount of qualifying 170
section 179 depreciation expense, including the taxpayer's 171
proportionate or distributive share of the amount of qualifying 172
section 179 depreciation expense allowed to any pass-through 173
entity in which the taxpayer has a direct or indirect ownership 174
interest. 175
(iii) Subject to division (A)(17)(a)(v) of this section, 176
for taxable years beginning in 2012 or thereafter, if the 177
increase in income taxes withheld by the taxpayer is equal to or 178
greater than ten per cent of income taxes withheld by the 179
taxpayer during the taxpayer's immediately preceding taxable 180
year, "two-thirds" shall be substituted for "five-sixths" for 181
the purpose of divisions (A)(17)(a)(i) and (ii) of this section. 182
(iv) Subject to division (A)(17)(a)(v) of this section, 183
for taxable years beginning in 2012 or thereafter, a taxpayer is 184
not required to add an amount under division (A)(17) of this 185
section if the increase in income taxes withheld by the taxpayer 186
and by any pass-through entity in which the taxpayer has a 187
direct or indirect ownership interest is equal to or greater 188
than the sum of (I) the amount of qualifying section 179 189
depreciation expense and (II) the amount of depreciation expense 190
allowed to the taxpayer by subsection (k) of section 168 of the 191
Internal Revenue Code, and including the taxpayer's 192
proportionate or distributive shares of such amounts allowed to 193
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As Introduced
any such pass-through entities. 194
(v) If a taxpayer directly or indirectly incurs a net 195
operating loss for the taxable year for federal income tax 196
purposes, to the extent such loss resulted from depreciation 197
expense allowed by subsection (k) of section 168 of the Internal 198
Revenue Code and by qualifying section 179 depreciation expense, 199
"the entire" shall be substituted for "five-sixths of the" for 200
the purpose of divisions (A)(17)(a)(i) and (ii) of this section. 201
The tax commissioner, under procedures established by the 202
commissioner, may waive the add-backs related to a pass-through 203
entity if the taxpayer owns, directly or indirectly, less than 204
five per cent of the pass-through entity. 205
(b) Nothing in division (A)(17) of this section shall be 206
construed to adjust or modify the adjusted basis of any asset. 207
(c) To the extent the add-back required under division (A) 208
(17)(a) of this section is attributable to property generating 209
nonbusiness income or loss allocated under section 5747.20 of 210
the Revised Code, the add-back shall be sitused to the same 211
location as the nonbusiness income or loss generated by the 212
property for the purpose of determining the credit under 213
division (A) of section 5747.05 of the Revised Code. Otherwise, 214
the add-back shall be apportioned, subject to one or more of the 215
four alternative methods of apportionment enumerated in section 216
5747.21 of the Revised Code.