Ohio State Income Tax: 2026 Rate, Brackets & Rules
Ohio went fully flat in 2026. After years of gradual cuts, House Bill 96 collapsed the state’s graduated brackets into a single 2.75% rate on nonbusiness income above $26,050 — with zero tax below that line. But the state rate is only half the story: most Ohioans also pay a city income tax, and many pay a school district tax on top.
This guide answers the questions Ohio taxpayers actually ask: how the 2026 flat tax works, what exemptions you get, why your city tax may dwarf your state tax, and how business income is treated differently. Run your own numbers with the free Ohio income tax calculator.
What is Ohio’s income tax rate in 2026?
Ohio taxes nonbusiness income at a flat 2.75% in 2026, with no tax on the first $26,050 of Ohio taxable income. This replaced the 2025 system, which had three tiers topping out at 3.125%. Every dollar above the $26,050 threshold is taxed at the same 2.75% rate regardless of total income.
The change came from House Bill 96, the state budget signed in June 2025. It continues a decade-long simplification: Ohio had nine brackets and a top rate above 5.9% back in 2013.
How does Ohio’s flat tax formula actually work?
For 2026, Ohio tax on nonbusiness income above $26,050 is $332 plus 2.75% of the amount over $26,050. Income at or below $26,050 owes nothing. Personal exemptions are subtracted from your income before the threshold is applied, so they can pull you under the zero-tax line entirely.
Example at the boundary: $30,000 of wages with a $2,400 exemption leaves $27,600 of taxable income — just $1,550 over the threshold, for a tax of roughly $375. Try your own figures in the Ohio income tax calculator to see the exact result.
What are Ohio’s personal exemptions for 2026?
Ohio’s personal exemption depends on your income: $2,400 if Ohio AGI is $40,000 or less, $2,150 from $40,001 to $80,000, and $1,900 from $80,001 to $500,000. Filers whose income minus exemptions falls under $30,000 also get a $20 exemption credit. The exemption shrinks as income rises, which slightly raises effective rates for higher earners even under the “flat” system.
Do I owe city or school district income tax in Ohio?
Probably yes — and this is Ohio’s biggest tax gotcha. More than 200 Ohio cities levy their own income tax, typically 1% to 3% (Columbus and Cleveland 2.5%, Cincinnati 1.8%, Toledo 2.5%). Separately, 214 school districts impose an income tax of 0.25% to 2%. A $100,000 earner in Columbus can face a combined state-plus-local rate near 5%, roughly double the state-only figure.
City tax is usually withheld by your employer, and most cities grant a credit for taxes paid to your workplace city so you aren’t fully double-taxed. Enter your city rate in the Ohio income tax calculator to see the combined burden — the state-only number alone is misleading for most residents.
How is business income taxed in Ohio?
Ohio business income — profits from sole proprietorships, LLCs, and S corporations — is taxed separately at a flat 3%, and the first $250,000 is completely exempt through the Business Income Deduction ($125,000 for married filing separately). This is more generous than the wage rules: a small business owner with $200,000 of qualifying business profit owes zero Ohio tax on it, while a wage earner at the same income pays the standard 2.75% formula.
Worked example: $75,000 salary (single)
- Gross wages: $75,000
- Personal exemption ($40–80k bracket): −$2,150
- Ohio taxable income: $72,850
- State tax ($332 + 2.75% × $46,800): $1,619.00 (2.16% effective)
- City tax (Columbus 2.5%): $1,875.00
- Combined state + city: $3,494.00 — the city tax exceeds the state tax
That last line is the point: comparing Ohio to other states on the 2.75% headline alone misses the local layer entirely.
Frequently Asked Questions
I live in Pennsylvania but work in Ohio. Do I pay Ohio income tax?
No — not on your wages. Ohio has reciprocity agreements with Pennsylvania, Indiana, Kentucky, Michigan, and West Virginia, so a resident of any of those states pays income tax to their home state instead. Note this covers state tax only; Ohio city tax can still apply where you physically work.
Does Ohio tax Social Security benefits?
No. Ohio fully exempts Social Security benefits from state income tax, and the exemption applies regardless of your income level. Pension and retirement income may qualify for additional credits — check the Ohio Department of Taxation for current figures.
What changed between 2025 and 2026?
House Bill 96 eliminated the 3.125% top bracket that applied to income above $100,000 in 2025, leaving a single 2.75% rate above the $26,050 threshold. High earners see the biggest cut; earners already in the 2.75% band see a simpler return but a similar bill.
When is my 2026 Ohio return due?
April 15, 2027. Ohio follows the federal deadline for individual returns (Form IT 1040). Estimated payments are due quarterly if you expect to owe more than the withholding covers — common for the self-employed and for business income.
How do I estimate my total Ohio tax including city tax?
Use the free Ohio income tax calculator — enter your income, exemption, and city rate for the combined figure. Commuting across state lines? Compare with the Pennsylvania income tax calculator to see the other side of the border.
Is Ohio’s flat tax really the second-lowest in the nation?
Among states with a flat income tax, Ohio’s 2.75% is second only to Arizona’s 2.5%. But that ranking ignores municipal taxes, which most flat-tax states don’t have — your all-in Ohio rate depends heavily on your city and school district.
Estimates only — not tax advice. Verify with the Ohio Department of Taxation or a tax professional.
