Ohio tax bill allows deductions for medical care and premium refunds

On April 2, 2025, the Ohio Legislature introduced House Bill 209, a significant piece of legislation aimed at modifying tax deductions related to medical expenses and insurance reimbursements. This bill seeks to alleviate the financial burden on taxpayers by allowing them to deduct certain medical care costs that exceed a specified percentage of their adjusted gross income, as well as providing clarity on the treatment of insurance refunds and reimbursements.

The primary provisions of House Bill 209 include the ability for taxpayers to deduct out-of-pocket medical expenses for themselves, their spouses, and dependents, provided these expenses surpass 7.5% of their federal adjusted gross income. This aligns with existing federal tax guidelines but aims to enhance accessibility for Ohio residents. Additionally, the bill clarifies definitions related to "medical care" and "qualified long-term care," ensuring consistency with federal tax codes.

Notably, the bill has sparked discussions among lawmakers regarding its potential impact on state revenue and the healthcare landscape. Proponents argue that the bill will provide much-needed financial relief to families facing high medical costs, particularly in a post-pandemic context where healthcare expenses have surged. Critics, however, express concerns about the implications for state tax revenue, fearing that increased deductions could lead to budget shortfalls.

The economic implications of House Bill 209 are significant. By enabling greater tax deductions for medical expenses, the bill could encourage more individuals to seek necessary healthcare services, potentially improving public health outcomes. However, the long-term financial impact on the state budget remains a point of contention, with some experts warning that the bill could exacerbate existing fiscal challenges.

As the legislative process unfolds, stakeholders are closely monitoring the bill's progress. If passed, House Bill 209 could reshape the financial landscape for Ohio taxpayers, particularly those with substantial medical expenses. The ongoing debates surrounding the bill highlight the delicate balance between providing taxpayer relief and maintaining fiscal responsibility within the state budget. The next steps will involve committee reviews and potential amendments, as lawmakers work to address concerns while advancing the bill's objectives.