OHIO LEGISLATIVE SERVICE COMMISSION
Office of Research Legislative Budget
www.lsc.ohio.gov and Drafting Office
H.B. 48 Bill Analysis
134th General Assembly
Click here for H.B. 48’s Fiscal Note
Version: As Introduced
Primary Sponsor: Reps. Roemer and Pavliga
Effective Date:
Michael Hinel, Attorney
SUMMARY
 Incorporates into Ohio income tax law changes to federal tax law taking effect since
March 27, 2020.
 Declares an emergency.
DETAILED ANALYSIS
Incorporation of Internal Revenue Code changes
The bill incorporates into Ohio tax law recent changes to the Internal Revenue Code
(IRC) or other federal law taking effect after March 27, 2020.1
Several changes to federal law are incorporated, including several changes made by the
“Consolidated Appropriations Act, 2021,” H.R. 133 of the 116th Congress, in December of 2020.
Several of these changes directly affect the tax base of many Ohio income tax taxpayers by
increasing or decreasing federal adjusted gross income (FAGI), the starting number for
determining a taxpayer’s Ohio taxable income.2 The incorporated changes also affect the tax
base of school districts levying an income tax on the basis of FAGI.3
The following is a list of some of the most significant of the federal law changes affecting
Ohio law:
1 R.C. 5701.11(A).
2 R.C. 5747.01(A), not in the bill.
3 R.C. 5748.01(E), not in the bill.
February 5, 2021
Office of Research and Drafting LSC Legislative Budget Office
Changes affecting individuals
 A temporary look-back rule for determination of earned income for purposes for the
earned income tax credit (EITC). (Ohio allows a piggy-back credit based on a taxpayer’s
federal EITC.)
 The extension of an exclusion from gross income for the discharge of indebtedness of a
qualified principal residence.
 An extension of the temporary allowance of a deduction for charitable contributions by
nonitemizers.
 A clarification that the educator expense tax deduction includes expenses for personal
protective equipment and other supplies related to the prevention of the spread of
COVID-19.
 An exclusion for emergency financial aid grants.
 The transition from a deduction for qualified tuition and related expenses to an
increased phase-out threshold of the Lifetime Learning Credit.
 Temporary special rules for health and dependent care flexible spending arrangements.
Changes affecting businesses
 The allowance of a 30-year depreciation period for certain residential rental property.
 The temporary allowance of a full deduction for business meals (generally, business
meals are only 50% deductible).
 A clarification of the tax treatment of Paycheck Protection Program loan forgiveness,
including a clarification that expenses paid with covered loans can be deductible.
 An extension of the payment deadline for certain deferred payroll taxes (including
certain self-employment taxes).
 The extension of the work opportunity tax credit. (Ohio allows a deduction for employee
wages that could not be deducted from the business owners’ FAGI due to the work
opportunity credit.)
 The extension of an exclusion for certain employer payments of student loans.
Reason for incorporation
Ohio tax law incorporates by reference parts of the IRC and other federal laws. Periodic
amendments to federal law do not become part of Ohio law unless they are incorporated by an
act of the General Assembly.4 The incorporation applies to only general, undated references to
the IRC or other federal laws, and does not apply to references that specify a date.
4 See State of Ohio v. Gill, 63 Ohio St.3d 53 (1992).
P a g e |2 H.B.48
As Introduced
Office of Research and Drafting LSC Legislative Budget Office
If federal tax law amendments are not incorporated, an affected taxpayer would have to
adjust the taxpayer’s federal adjusted gross income or taxable income, either by adding or
subtracting the relevant amounts, in order to compute the taxpayer’s Ohio tax liability.
Alternative tax law election
The bill also revises Ohio tax law with respect to an election available to taxpayers
whenever federal amendments become incorporated. Current law authorizes a taxpayer whose
taxable year ended after March 30, 2018, and before March 27, 2020, to irrevocably elect to
apply to the taxpayer’s state tax calculation the federal tax laws that applied to that taxable
year. (The two March dates are the dates of the two most recent incorporations.) The election
was available to taxpayers who were subject to the personal income tax and to electric and
telephone companies that are subject to municipal income taxes.
The bill allows this election to be made for a taxpayer’s taxable year ending after
March 27, 2020, but before the incorporation provision’s effective date. The bill retains a
provision specifying that similar elections made under prior versions of the law remain effective
for the taxable years to which the previous elections applied.5
HISTORY
Action Date
Introduced 02-03-21
H0048-I-134/ts
5 R.C. 5701.11(B).
P a g e |3 H.B.48
As Introduced


Statutes affected:
As Introduced: 5701.11