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Ohio’s Opportunity Zone (OZ) Tax Credit program, which awards 10% transferable, non-refundable Ohio tax credits for qualifying equity investments, saw record demand in 2024 that shut out many investors. The allocation of Ohio OZ tax credits for fiscal year 2024 was reduced to $25 million (from $50 million in 2023), and the full year’s allocation was exhausted after just one of the two semi-annual application rounds, leaving investors who made qualifying equity investments between July 1 and December&nbsp;31, 2024, unable to apply for credits. At this time, the Ohio Department of Development has not indicated that there will be an opportunity to apply for credits for “lost” investments that would otherwise have qualified for the Ohio OZ program.

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The first application round for fiscal year 2025 opens July&nbsp;10 for qualifying investments made between January 1 and June&nbsp;30, 2025. Given the expected high demand and $25 million limit on available credits for the entire fiscal year, investors looking to take advantage of this incentive should plan early to avoid being excluded.

Increased competition: With demand at an all-time high and no expected increase in funding, applicants should anticipate heightened competition for available credits.

Investment structuring: Proper structuring of investments remains critical to ensuring compliance with program requirements and optimizing eligibility for tax credits.

Risk of “lost” qualifying investment: If all available credits are allocated following the July 2025 application round, none will be available for investments made in the second half of the calendar year.

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Tax credit equity: Federal and state tax credits, such as <a>Historic Tax Credits</a>, <a>New Markets Tax Credits</a>, and <a>Low-Income Housing Tax Credits</a>, may allow for additional Ohio OZ tax credits.

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Application timing: Investors should prepare to submit applications as soon as the program reopens to improve their chances of securing an allocation.

As the next application cycle approaches, businesses, real estate developers, and individual investors should evaluate their investment plans and ensure they are positioned to apply successfully.

<a href="https://www.aboutpmc.com/professionals/alexander-j-previts/" target="_blank" rel="noreferrer noopener">Alexander J. Previts, CPA</a>* Development Finance Manager, PMC 216.469.7005 <a href="mailto:Alexander.Previts@aboutPMC.com">Alexander.Previts@aboutPMC.com</a>

<a href="http://www.aboutpmc.com/" target="_blank" rel="noreferrer noopener">Project Management Consultants</a> (PMC), a wholly owned subsidiary of Thompson Hine, advises the development community in Ohio and across the country on a broad range of incentives and government programs such as Historic Tax Credits and New Markets Tax Credits. Our financial consultants provide comprehensive guidance on optimizing investments and maximizing tax-free gains on eligible projects.

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This advisory bulletin may be reproduced, in whole or in part, with the prior permission of Thompson Hine LLP and acknowledgment of its source and copyright. This publication is intended to inform clients about legal matters of current interest. It is not intended as legal advice. Readers should not act upon the information contained in it without professional counsel.

This document may be considered attorney advertising in some jurisdictions.

https://admin.thompsonhine.com/wp-content/uploads/2025/02/Qualified-Opportunity-Zone-Alert-Ohio-Opportunity-Zone-Tax-Credit-Program-Updates.pdf

Ohio Opportunity Zone Tax Credit Program Updates

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