SENATE PASSES BLESSING BILL TO SIMPLIFY TAX CODE FOR OHIOANS

COLUMBUS — The Ohio State Senate today passed a bill authored by Louis W. Blessing, III (R-Colerain Township) designed to help taxpayers. The bill simplifies the filing of state taxes for some individuals and businesses, following changes made to the federal tax code last year.

"Most people are probably not aware that changes to federal tax law do not become part of Ohio law unless we pass legislation incorporating those changes," said Blessing. "In this case, the legislation will prevent some Ohio taxpayers from having to file one amount of taxable income on federal returns and a different amount for state returns." 

Blessing's bill incorporates into Ohio law the changes in federal tax law made by the Inflation Reduction Act of 2022 and Consolidated Appropriations Act. 

The most significant changes caused by the Inflation Reduction Act are:

• Extends limitations on excess business losses from January 1, 2027, to January 1, 2029.
• Similarly extends limitations on excess farm loss from January 1, 2027, to January 1,2029.
• Increases the current maximum deduction per square foot for energy efficient commercial buildings.

The most significant changes caused by the Consolidated Appropriations Act are:

• Authorizes tax-free rollovers of up to $35,000 from 529 education savings plans to Roth IRAs.
• Authorizes up to $1,000 withdrawals from tax-preferred retirement plans for certain emergency expenses without triggering the standard 10% penalty.
• Requires automatic enrollment and yearly escalation of employee contributions into retirement plans started after December 29, 2022.
• Increases the age of the required beginning date for mandatory retirement account distributions from 72 to 73 in 2023, and then to age 75 in 2033.

The incorporated changes also affect the tax base of school districts levying an income tax on the basis of federal adjusted gross income.