HB 200 Summary

• Modifies Ohio income tax treatment for income subject to pass-through entity taxes imposed by other states, allowing taxpayers to add back taxes paid to other states under notice 2020-75 compliant laws.

• Adds new division (A)(40) to section 5747.01 requiring individuals to add back any income taxes deducted in federal or Ohio adjusted gross income if derived from income subject to another state's pass-through entity tax enacted for IRS notice 2020-75 compliance.

• Clarifies that income taxes added back under the new provision are not deductible from Ohio adjusted gross income and may be treated as business income eligible for the business income deduction under division (A)(28).

• Adds similar provisions for trusts and estates under division (S)(16) of section 5747.01 and modifies section 5747.05 to exclude such income taxes from credit limitations.

• Applies to taxable years ending on or after January 1, 2023, with optional application to taxable years beginning January 1, 2022.