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Increased Allocation for Fiscal Years 2026 and 2027

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On June 30, 2025, Governor Mike DeWine signed Amended Substitute House Bill 96 (H.B. 96), increasing Ohio’s Opportunity Zone (OZ) Tax Credit allocation from $25 million to $50 million per fiscal year for FY 2026 and FY 2027. The enhanced allocation applies to qualifying investments made in calendar years 2025 and 2026. The first of two FY application rounds opened on July 10, 2025, but H.B. 96 does not take effect until September 30, 2025. According to the Ohio Department of Development (ODOD), the current application window will be capped at $25 million, with the remaining $25 million reserved for the second (final) FY 2026 round.*

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Updated Application Schedule by Fiscal Year

FY 2026:

July 2025 Application (July 10 – August 1, 2025) for qualifying investments made January 1, 2025 – June 30, 2025.

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January 2026 Application (January 12 – January 19, 2026) for qualifying investments made July 1, 2025 – December 31, 2025.

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FY 2027:

July 2026 Application (July 10 – July 17, 2026) for qualifying investments made January 1, 2026 – June 30, 2026.

January 2027 Application (January 11 – January 18, 2027) for qualifying investments made July 1, 2026 –December 31, 2026.

$25 Million in Credits Expected for Second Half of 2025 Investments

The second application round for FY 2026 is scheduled to open on January 10, 2026. Unless the Legislative Service Commission determines that H.B. 96 should apply retroactively to the July 2025 round, an additional $25 million in Ohio OZ tax credits will be available for qualifying investments made between July 1 and December 31, 2025.

Before the increased allocation included in H.B. 96, there was a strong likelihood that no credits would be available following the July round, and the January round would not occur. ODOD has since confirmed that more than $25 million in applications were submitted within the first five minutes of the July portal opening, with over $45 million submitted in less than 24 hours—underscoring the significant demand for credits and the need to apply early.

Refined definition of “qualifying investment”: Applicant contributions sourced from borrowed funds may qualify, but grants do not. Further clarification is needed, especially for nonprofits or entities using construction draws.

New $5 million cap per project: The cap applies to projects, not investors. Because multiple investors often apply for the same project, this change could trigger competition among investors seeking credits for high-dollar projects.

Shortened application periods: Each round is now open for just eight days (from 21 previously). For January 2026, the application window is adjusted to January 12-19 to avoid a weekend start.

Sunset of recurring allocations: H.B 96 removes automatic annual funding beyond FY 2027, though a future renewal is likely during Ohio’s next biennial budget cycle.

Carryover provision: Any unused allocation from FY 2026 will roll over into FY 2027. Given the demand, carryover is unlikely.

Looking Ahead: What to Know for January 2026

*Uncertainty remains for FY 2026: Currently, $25 million in allocation is expected to be available for Ohio OZ applications submitted between January 12 and January 19, 2026. However, if the Legislative Service Commission determines that the changes under H.B. 96 apply retroactively, the additional $25 million may be absorbed during the July 2025 round, leaving no allocation for the January window.

Demand is intensifying: With limited allocation and heightened interest, applicants should anticipate significant competition.

Investment structure matters: Properly structured investments can unlock additional benefits. Combining OZ credits with other programs—such as Historic Tax Credits (HTC), New Market Tax Credits (NMTC), or Low-Income Housing Tax Credits (LIHTC)—may enhance value.

Apply Early: Given the speed at which funds were exhausted in July, investors should prepare all documentation in advance to apply promptly when the portal reopens.

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.

For questions about eligibility, structuring, or the application process, stakeholders are encouraged to begin planning now.

<a href="https://www.aboutpmc.com/professionals/alexander-j-previts/" target="_blank" rel="noreferrer noopener">Alexander J. Previts, CPA</a>* Development Finance Manager, PMC 216.566.5876 <a href="mailto:Alexander.Previts@aboutPMC.com">Alexander.Previts@aboutPMC.com</a>

<a href="http://www.aboutpmc.com/">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.

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/2025/07/Ohio-Opportunity-Zone-Tax-Credits-Doubled-for-2026-2027.pdf

Ohio Opportunity Zone Tax Credits Doubled for 2026-2027

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