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As Passed by the House
136th
General Assembly
Regular
Session
H. B. No. 48
2025-2026
Representatives Mathews, A., Santucci
Cosponsors: Representatives Roemer,
Thomas, D., Troy, Click, Daniels, Hall, D., Lear, Rogers, Thomas, J.,
Abrams, Barhorst, Bird, Brennan, Brownlee, Claggett, Cockley, Craig,
Creech, Deeter, Dovilla, Fischer, Fowler Arthur, Ghanbari, Glassburn,
Grim, Gross, Hall, T., Hiner, Holmes, Hoops, Jarrells, John, Johnson,
King, Kishman, Klopfenstein, LaRe, Lawson-Rowe, Lett, Lorenz,
Mathews, T., McNally, Miller, J., Miller, M., Mohamed, Newman,
Odioso, Oelslager, Piccolantonio, Plummer, Rader, Ray, Richardson,
Ritter, Robb Blasdel, Robinson, Russo, Salvo, Schmidt, Sigrist, Sims,
Somani, Swearingen, Synenberg, Thomas, C., White, A., White, E.,
Williams, Workman, Young
A
BILL
To
amend sections 5747.70 and 5747.78 of the Revised Code
to
modify the income tax deductions for contributions to 529 plans and
ABLE accounts.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section
1.
That
sections 5747.70 and 5747.78 of the Revised Code be amended to read
as follows:
Sec.
5747.70.
(A)
In computing Ohio adjusted gross income, a deduction from federal
adjusted gross income is allowed to a taxpayer who contributes to or
purchases tuition units under a qualified tuition program established
in accordance with section 529 of the Internal Revenue Code. The
amount of the deduction shall equal the amount contributed or
purchased during the taxable year to the extent that the amounts of
such contributions and purchases were not deducted in determining the
contributor's or purchaser's federal adjusted gross income for the
taxable year. The combined amount of contributions and purchases
deducted in any taxable year
by
a taxpayer or the taxpayer and the taxpayer's spouse, regardless of
whether the taxpayer and the taxpayer's spouse file separate returns
or a joint return, is limited to four thousand dollars
shall
not exceed the annual contribution limit
for
each beneficiary for whom contributions or purchases are made. If the
combined annual contributions and purchases for a beneficiary exceed
four
thousand dollars
the
annual contribution limit
,
the excess may be carried forward and deducted in future taxable
years until the contributions and purchases have been fully deducted.
(B)
In computing Ohio adjusted gross income, a deduction from federal
adjusted gross income is allowed for:
(1)
Income related to tuition units and contributions that as of the end
of the taxable year have not been refunded pursuant to the
termination of a qualified tuition program payment contract or
account to the extent that such income is included in federal
adjusted gross income.
(2)
The excess of the total purchase price of tuition units refunded
during the taxable year pursuant to the termination of a qualified
tuition program payment contract over the amount of the refund, to
the extent the amount of the excess was not deducted in determining
federal adjusted gross income. Division (B)(2) of this section
applies only to units for which no deduction was allowable under
division (A) of this section.
(C)
In computing Ohio adjusted gross income, there shall be added to
federal adjusted gross income the amount of loss related to tuition
units and contributions that as of the end of the taxable year have
not been refunded pursuant to the termination of a qualified tuition
program payment contract or account to the extent that such loss was
deducted in determining federal adjusted gross income.
(D)
For taxable years in which distributions or refunds are made under a
qualified tuition program for any reason other than payment of higher
education expenses, or the beneficiary's death, disability, or
receipt of a scholarship as described in section 3334.10 of the
Revised Code:
(1)
If the distribution or refund is paid to the purchaser or contributor
or beneficiary, any portion of the distribution or refund not
included in the recipient's federal adjusted gross income shall be
added to the recipient's federal adjusted gross income in determining
the recipient's Ohio adjusted gross income, except that the amount
added shall not exceed amounts previously deducted under division (A)
of this section less any amounts added under division (D)(1) of this
section in a prior taxable year.
(2)
If amounts paid by a purchaser or contributor on or after January 1,
2000, are distributed or refunded to someone other than the purchaser
or contributor or beneficiary, the amount of the payment not included
in the recipient's federal adjusted gross income, less any amounts
added under division (D) of this section in a prior taxable year,
shall be added to the recipient's federal adjusted gross income in
determining the recipient's Ohio adjusted gross income.
(E)
As used in this section, the "annual contribution limit"
for taxable years beginning in 2025 equals eight thousand dollars, if
the taxpayer and the taxpayer's spouse file a joint return, or four
thousand dollars, in the case of all other taxpayers. For taxable
years beginning in 2026 and thereafter, the tax commissioner shall
adjust the annual contribution limits in the manner described in this
division.
In
August of each year, beginning in 2026, the commissioner shall
multiply each annual contribution limit by the percentage increase in
the gross domestic product deflator for that period calculated during
that August under section 5747.025 of the Revised Code; add the
resulting product to the respective annual contribution limit for
taxable years beginning in the preceding calendar year; and round the
resulting sum up to the nearest multiple of fifty dollars. The
adjusted amounts apply to taxable years beginning in the calendar
year in which the adjustment is made and to taxable years beginning
in each ensuing calendar year until a calendar year in which a new
adjustment is made pursuant to this division. The commissioner shall
not make a new adjustment in any calendar year in which the amount
resulting from the adjustment would be less than the amount resulting
from the adjustment in the preceding calendar year.
Sec.
5747.78.
In
computing Ohio adjusted gross income, a deduction from federal
adjusted gross income is allowed to a contributor for amounts
contributed during the taxable year to an ABLE savings account opened
in accordance with sections 113.50 to 113.56 of the Revised Code to
the extent that the amounts contributed have not been deducted in
computing the contributor's federal adjusted gross income for the
taxable year. The total amount of contributions deducted for any
taxable year
by
a taxpayer or the taxpayer and the taxpayer's spouse, regardless of
whether the taxpayer and the taxpayer's spouse file separate returns
or a joint return,
shall
not exceed the annual contribution limit for each beneficiary for
whom contributions are made. If the total annual contributions for a
beneficiary exceed the annual contribution limit, the excess may be
carried forward and deducted in future taxable years until the
contributions have been fully deducted.
As
used in this section, "annual contribution limit"
means
the limit prescribed in section 5747.70 of the Revised Code on the
dollar amount of contributions and purchases that a taxpayer, or a
taxpayer and the taxpayer's spouse, may deduct during a taxable year
under that section with respect to each beneficiary for whom
contributions or purchases are made
has
the same meaning as in section 5747.70 of the Revised Code
.
Section
2.
That
existing sections 5747.70 and 5747.78 of the Revised Code are hereby
repealed.