Breaking: Ohio Opportunity Zone Tax Credit Application is Live
December 16, 2019
Applications for the Ohio Opportunity Zone Tax Credit are now live, and the Ohio Development Services Agency will review and award the applications on a first-come, first-served basis beginning January 2, 2020, at 10:00am EST and ending on January 31, 2020, at 5:00pm EST.
Successful applicants will receive a transferrable certificate for a non-refundable income tax credit equal to 10% of the amount invested into Ohio opportunity zones, whether with eligible gains or ordinary after-tax cash. The OZ Tax Credit is capped at $1 million per taxpayer, and up to $50 million for all taxpayers, during the 2020-2021 biennium period.
To be eligible for the OZ Tax Credit, a taxpayer must make a calendar year 2019 investment into an Ohio qualified opportunity fund (“Fund”) that holds 100% of its assets in one or more Ohio qualified opportunity zone businesses (“QOZB”) or qualified opportunity zone business property (“QOZBP”).
The application must include:
- The taxpayer’s bank statement evidencing an investment into the Fund;
- The Fund’s certification of the taxpayer’s investment (“Form A”); and
- The QOZB’s certification of the Fund’s investment (“Form B”).
If the taxpayer invested into a Fund that made an investment into a QOZB, then the Fund would return a completed Form A to the taxpayer, and the QOZB would return a completed Form B to the taxpayer. If the Fund made a direct investment into a QOZBP, then the Fund would return completed copies of both Form A and Form B to the taxpayer. In either case, the taxpayer would use the information provided on Form A and Form B to complete its application for the OZ Tax Credit.
Under 26 U.S.C. Section 1400Z-2 and the proposed regulations thereunder (the "OZ Act"), Congress has authorized special federal income tax treatment for taxpayers who invest capital gains into Treasury-designated “opportunity zones”, including temporary deferral and partial reduction of the capital gains tax liability. On the tenth anniversary of the investment, it becomes eligible for a tax-free sale. Ohio’s OZ Tax Credit complements the federal OZ Act by providing a dollar-for-dollar credit against state income tax for calendar year 2019 investments into Ohio opportunity zones.
Kegler Brown Hill + Ritter advises taxpayer-investors, fund managers, developers, and entrepreneurs on tax-advantaged qualified opportunity zone transactions. For questions on the Ohio Opportunity Zone Tax Credit Application or other opportunity zone-related matters, please contact Andrew P. Doup at (614) 462-5488 or [email protected].