Governor DeWine Signs Tax Conformity Bill into Law
COLUMBUS, Ohio — Ohio Governor Mike DeWine has signed Substitute Senate Bill 9 into law, legislation that updates Ohio’s tax code to reflect recent changes in federal tax law.
The measure, sponsored by Louis W. Blessing III, aligns Ohio law with updates made to the Internal Revenue Code since March 7, 2025. The legislation also includes an emergency clause, allowing the changes to take effect immediately.
The bill was passed during the Ohio General Assembly’s 136th session.
Aligning State and Federal Tax Law
Senate Bill 9 primarily updates sections 5701.11 and 5747.01 of the Ohio Revised Code, ensuring that Ohio’s tax system continues to mirror federal definitions and provisions used when calculating income taxes.
State lawmakers periodically pass legislation like Senate Bill 9 to maintain “tax conformity” with federal law. When Congress changes the Internal Revenue Code, states that base portions of their tax system on federal definitions must update their own statutes to keep the systems aligned.
Without those updates, Ohio taxpayers and businesses could face discrepancies between federal and state tax filings.
What the Law Does
Under the newly signed legislation:
References to the Internal Revenue Code in Ohio tax law will now reflect federal tax law as it existed after March 7, 2025.
The law allows taxpayers with taxable years ending after March 15, 2025, and before the bill’s effective date to elect to apply the updated federal provisions when filing state returns.
Those elections are considered irrevocable once the taxpayer files a return incorporating the federal changes.
Prior elections made under earlier versions of the statute remain valid for the applicable tax years.
Adjustments to Ohio Adjusted Gross Income
The bill also updates the statutory definition of Ohio Adjusted Gross Income, which is derived from federal adjusted gross income but modified through various additions and deductions under Ohio law.
Examples of adjustments listed in the statute include:
Adding certain interest or dividend income from other states.
Deducting Social Security benefits and certain railroad retirement benefits.
Allowing deductions for medical insurance costs and qualified medical expenses.
Deductions tied to military pay, veterans benefits, disaster response work, educator expenses, and contributions to various savings programs such as ABLE accounts and college savings plans.
The statute also includes provisions related to business deductions, depreciation adjustments, capital gains from certain Ohio venture capital investments, and other tax-related adjustments.
Why the Bill Was Declared an Emergency
Because Ohio’s tax system relies heavily on federal definitions and calculations, lawmakers included an emergency clause to prevent inconsistencies between federal and state filings.
The clause allows the law to take effect immediately, helping ensure that Ohio taxpayers and tax professionals can apply consistent rules when preparing returns tied to federal income calculations.
State officials say conformity bills like Senate Bill 9 are a routine but necessary step to maintain a streamlined tax system and reduce administrative complexity for both taxpayers and the state.
