Guides
Ohio State Income Tax: 2026 Rates and Brackets
For tax year 2026, Ohio state income tax is a flat 2.75% on taxable nonbusiness income above $26,050, and the first $26,050 is exempt. Ohio finished a multi-year rate cut under House Bill 96 (the FY2026-27 budget), collapsing its old graduated schedule into a single rate. Business income and local city taxes follow separate rules covered below.
Ohio state income tax rates for 2026
Ohio taxes 2026 nonbusiness income at one rate: 2.75% on the amount above $26,050. Income at or below $26,050 is not taxed. The tax is calculated as 2.75% multiplied by (taxable nonbusiness income minus $26,050). This replaced the two-rate 2025 schedule and applies the same way to single and married-filing-jointly returns.
| Taxable nonbusiness income (2026) | Rate | Tax owed |
|---|---|---|
| $0 to $26,050 | 0% | $0 |
| Above $26,050 | 2.75% | 2.75% of the amount over $26,050 |
A worked example: a single filer with $75,000 of Ohio taxable nonbusiness income subtracts the $26,050 exemption, leaving $48,950. At 2.75%, the Ohio tax is about $1,346. The rate does not step up at higher incomes for 2026, so a filer at $250,000 pays the same 2.75% marginal rate on income above the threshold as one at $75,000.
The $26,050 figure is indexed for inflation, so it may adjust in later years. Ohio taxable income starts from federal adjusted gross income (AGI), then applies Ohio-specific additions, deductions, and the personal exemption, so your Ohio taxable base often differs from your federal one.
How Ohio reached a flat 2.75% rate
Ohio phased down its top income tax rate over several years, reaching a single 2.75% rate in 2026. The top rate fell from 3.5% for 2023 to 3.125% for 2025, then to 2.75% for 2026, when the remaining upper bracket was eliminated. Governor Mike DeWine signed House Bill 96 on June 30, 2025, locking in the final step.
| Tax year | Top marginal rate | Structure |
|---|---|---|
| 2023 | 3.5% | Graduated, multiple brackets |
| 2025 | 3.125% | Two rates: 2.75% and 3.125% |
| 2026 | 2.75% | Flat above $26,050 |
The change matters most for higher earners, who previously paid an extra 0.375 percentage points on income over $100,000. Under the flat structure, that surtax is gone. Lower- and middle-income filers already paid 2.75% on income above the exemption, so their marginal rate is unchanged, though the exemption threshold still shields the first $26,050.
Because the rate is flat, Ohio’s marginal and effective rates now converge more closely as income rises. To see how those two measures differ, review marginal vs effective tax rate.
The $26,050 exemption and who owes no Ohio tax
Ohioans with $26,050 or less of taxable nonbusiness income owe $0 in state income tax for 2026. The exemption works like a zero-rate bracket at the bottom of the schedule: it applies to every filer, not just low earners, so the first $26,050 of everyone’s taxable nonbusiness income escapes state tax. This is separate from Ohio’s per-person personal exemption, which further reduces taxable income based on Ohio AGI.
The threshold is tied to Ohio taxable nonbusiness income, not gross wages. After the standard federal-to-Ohio adjustments and the personal exemption, a filer with modest wages may land at or below $26,050 and owe nothing to the state, even while still owing federal tax and local city tax. Local municipal taxes have no comparable exemption floor, so many residents who owe no state tax still owe city tax on their wages.
Ohio business income and the Business Income Deduction
Ohio taxes business income under a separate track from wages. Owners of pass-through entities and sole proprietors may claim the Business Income Deduction (BID) of up to $250,000 of eligible business income ($125,000 for married filing separately). Business income above the deduction is taxed at a flat 3%, not the 2.75% nonbusiness rate.
The deduction covers income reported on Schedule C, partnership and S corporation K-1s, and similar pass-through sources apportioned to Ohio. The mechanics can favor owners who split income between reasonable wages and distributions, though wage income is nonbusiness income taxed at 2.75%. How the deduction and the 3% rate net out depends on entity type, income level, and how income is characterized, so results vary by situation.
| Income type (2026) | Ohio treatment |
|---|---|
| Nonbusiness income (wages, most W-2 income) | 0% up to $26,050; 2.75% above |
| Eligible business income, first $250,000 ($125,000 MFS) | Deducted (0%) |
| Business income above the deduction | Flat 3% |
Owners weighing entity structure or the SALT-cap workaround should also review the pass-through entity tax (PTET) election and the federal Section 199A QBI deduction, which operate independently of Ohio’s BID.
Ohio municipal income taxes: RITA, CCA, and self-administered cities
Most Ohio cities and villages levy their own municipal income tax on top of the state tax, typically 1% to 3%. These local taxes apply to earned income (wages, salaries, commissions) and net business profits, and they have no $26,050 exemption. Municipalities collect through the Regional Income Tax Agency (RITA), the Central Collection Agency (CCA), or their own tax office.
RITA administers tax for hundreds of member municipalities across the state, while CCA serves Cleveland and a set of other cities. Some large cities, including Columbus and Cincinnati, run their own collection offices. A rate above 1% generally requires voter approval, which is why local rates cluster between 1% and 2.5%.
| City | 2026 municipal rate (approx.) | Collector |
|---|---|---|
| Columbus | 2.5% | Self-administered |
| Cleveland | 2.5% | CCA |
| Akron | 2.5% | RITA |
| Cincinnati | 1.8% | Self-administered |
Ohio generally taxes municipal income both where you work and where you live. Most cities offer a credit for taxes paid to the work city, often up to but sometimes capped below the resident rate, so a resident may owe the difference if the home rate exceeds the credited amount. Self-employed residents and those with rental income typically must file directly with RITA, CCA, or the city, even if an employer withholds nothing. Because rules and credits differ by municipality, confirm your specific city’s rate and credit terms before filing.
Ohio also layers a school district income tax in some areas: roughly 200 districts levy an added tax on residents, separate from city tax and collected by the state. Not every district has one, so check whether your district imposes it.
Ohio income tax in context
Ohio’s flat 2.75% state rate is low relative to many states, but the layered municipal and school-district taxes can push a resident’s combined local burden higher than the headline rate suggests. For where Ohio ranks nationally on combined state and local taxes, see the State and Local Tax Burden Report 2026. Ohio residents also pay sales tax; the mechanics are covered in the Ohio sales tax guide. For a comparison state with a very different, still-graduated structure, see New York State income tax.
Frequently asked questions
What is the Ohio state income tax rate for 2026?
For 2026, Ohio has a flat 2.75% income tax rate on taxable nonbusiness income above $26,050, with the first $26,050 exempt. The rate applies the same way to single and married-filing-jointly filers. Business income above the $250,000 Business Income Deduction is taxed separately at a flat 3%. Local city taxes apply on top.
At what income do you start paying Ohio income tax?
Ohio does not tax the first $26,050 of taxable nonbusiness income in 2026, so filers at or below that amount generally owe $0 in state tax. The threshold is measured on Ohio taxable nonbusiness income after federal-to-Ohio adjustments and the personal exemption, not on gross wages, so the wage level that triggers tax varies by filer.
Is Ohio income tax a flat tax now?
Yes, for nonbusiness income. Beginning in tax year 2026, Ohio applies a single 2.75% rate to nonbusiness income above $26,050 under House Bill 96, replacing the former graduated brackets. Business income has its own rules: the first $250,000 is deductible ($125,000 if married filing separately), and the excess is taxed at a flat 3%.
Do I pay both Ohio state and city income tax?
In most cases, yes. Ohio state income tax and municipal (city) income tax are separate. If you live or work in a municipality that levies an income tax, typically 1% to 3%, you may owe it in addition to state tax. Many cities grant a credit for taxes paid to your work city, though the credit is sometimes capped below the resident rate.
What is RITA in Ohio?
RITA, the Regional Income Tax Agency, is a government agency that collects municipal income tax for hundreds of Ohio cities and villages that contract with it. If you live or work in a RITA member municipality, you file and pay local tax through RITA rather than the state. Other cities use CCA (Central Collection Agency) or run their own tax offices.
How is Ohio business income taxed in 2026?
Ohio lets pass-through owners and sole proprietors deduct up to $250,000 of eligible business income ($125,000 for married filing separately) through the Business Income Deduction. Business income above the deduction is taxed at a flat 3%, separate from the 2.75% nonbusiness rate. How this nets out depends on entity type, income level, and how income is characterized.
Reviewed by The Ledgerism Editorial Team. Last reviewed: July 2026.