Compare taxes and see how much you save moving from Kentucky to Ohio
At the state level, Ohio is substantially cheaper than Kentucky for most earners—its 0% rate on the first $26,050 and progressive rates topping at 3.5% save a $100,000 earner roughly $1,952 per year compared to Kentucky’s flat 4.0%. However, Ohio’s local tax system is unusually complex: most Ohio residents pay a city income tax (typically 2%–2.5%, e.g., Columbus 2.5%, Cleveland 2.5%) plus potentially a School District Income Tax. Adding those in can bring the effective Ohio rate close to—or past—Kentucky’s total. Kentucky residents in Louisville or Lexington face their own 2.2%–2.25% occupational tax. Both states are reducing their rates: Kentucky is on a path to 3.5% by 2029, making it increasingly competitive.
Flat Rate (Falling to 3.5%)
4.0% flat state income tax; Louisville and Lexington add 2.2–2.25% local tax
Top State Rate (0% up to $26K)
0% on first $26,050; progressive to 3.5%; plus city and school district taxes
At $100,000 income:
That is $163/month back in your pocket!
| Income | KY Tax | OH Tax | Savings | 10-Year |
|---|---|---|---|---|
| $50,000 | $2,000 | $662 | $1,338 | $13,380 |
| $75,000 | $3,000 | $1,355 | $1,645 | $16,450 |
| $100,000 | $4,000 | $2,048 | $1,952 | $19,520 |
| $150,000 | $6,000 | $3,761 | $2,239 | $22,390 |
| $250,000 | $10,000 | $7,261 | $2,739 | $27,390 |
| $500,000 | $20,000 | $16,011 | $3,989 | $39,890 |
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Talk to a CPA About Your State Move →Not necessarily. Ohio’s state rate saves $1,952 at $100,000 income compared to Kentucky, but most Ohio residents also pay a municipal income tax—Columbus and Cleveland both charge 2.5%—plus potentially a School District Income Tax of up to 2%. Add those together and an Ohio resident in Columbus could pay 2.5% (city) + up to 3.5% (state) = an effective rate close to or above Kentucky’s 4.0% flat. Always calculate total burden for the specific Ohio city you’re considering.
Kentucky enacted legislation to reduce its flat income tax rate in annual increments, contingent on revenue growth targets. The rate fell from 5% to 4.5% in 2023, then to 4.0% in 2024. Further reductions toward 3.5% are scheduled through 2029 if revenue conditions are met. This trajectory makes Kentucky increasingly competitive on income tax, especially compared to Ohio’s complex local tax structure.
Louisville and Columbus are both affordable mid-size cities. Louisville generally has a slightly lower cost of living, particularly housing. However, Columbus has a larger and faster-growing economy with more major employers and a strong university presence (Ohio State). Columbus residents should budget for the 2.5% city income tax, which does not apply in Louisville (though Louisville levies a 2.2% occupational tax on earnings).
Ohio does not tax Social Security benefits. For other retirement income, Ohio allows a retirement income credit for taxpayers aged 65+ with retirement income. The credit can offset up to $200 of tax owed. Kentucky taxes most retirement income but exempts the first $31,110 of pension/retirement income per person. For retirees with moderate income, both states offer some relief, though neither is as generous as states like Georgia or Florida.