OH HB565

Allows a tax credit against Ohio income tax or commercial activity tax for graduates or their employers who make payments on qualifying student loans for degrees earned from Ohio colleges or universities on or after January 1, 2014

Defines qualifying individuals as state residents who earned a bachelor's or associate's degree from an Ohio institution and were employed at least 16 hours per week, self-employed, or on military service during the tax period

Sets initial principal loan caps of $9,700 for bachelor's degrees and $3,950 for associate's degrees in 2015, with annual adjustments based on gross domestic product deflator beginning in 2016

Credit amount equals the lesser of benchmark monthly payment (calculated at federal Stafford loan rates) or actual monthly payment, multiplied by months in tax period when loans were paid

Excess credits may be carried forward for up to 10 years; credit is reduced by 50% if employer employs graduate fewer than 32 hours per week; credit placed 16th in income tax credit priority order and 3rd in commercial activity tax credit priority order