Ohio’s tax system is one of the most layered in the United States. As of tax year 2026, Ohio's state income tax is a flat 2.75% above a $26,050 zero-tax threshold, plus a $332 base amount — simplified under House Bill 96 (signed June 2025), which phased out the old graduated bracket system (top rate 3.125% in 2025 and 3.5% in 2024). Even with the state layer now simple, residents must also navigate municipal income taxes charged by nearly every Ohio city, plus a unique Ohio-only levy called the School District Income Tax (SDIT) that applies to residents of roughly 200 school districts. Understanding all three layers is essential to accurately estimating your total Ohio tax burden.
This guide walks through every component of the Ohio tax system for 2026: state income tax, SDIT, municipal income tax, property tax, sales tax, and retirement income rules.
Ohio completed a major income tax simplification for tax year 2026 under House Bill 96 (signed June 2025): the state moved from a graduated, multi-bracket system to a single flat rate. For 2026, Ohio's state income tax is:
Ohio's personal exemption is $2,400 up to $40,000 of income, $2,150 from $40,001 to $80,000, $1,900 from $80,001 to $500,000 and $0 above $500,000, and a $20 exemption credit applies when income less exemptions is under $30,000. This is a genuine flat rate above the zero-bracket floor — there's no separate top bracket anymore. An Ohio resident earning $150,000 pays 0% on the first $26,050 and 2.75% on the taxable amount above that (net of Ohio's personal exemption), which, with the $332 base amount, works out to $3,688 for a single filer with wage income and the $1,900 personal exemption for this income level (the $332 base and 2.75% rate are confirmed by the Legislative Service Commission's analysis of the enacted budget bill; the statute text and the 2026 tax form have not yet been read directly). This is down from a graduated system whose top rate was 3.125% in 2025 and 3.5% in 2024.
| State | Income Tax System | Tax on $75,000 Income (approx) | Tax on $150,000 Income (approx) |
|---|---|---|---|
| Ohio (state only) | $332 + 2.75% above $26,050 | ~$1,619 | ~$3,688 |
| Indiana | Flat 2.95% | ~$2,183 | ~$4,396 |
| Pennsylvania | Flat 3.07% | ~$2,303 | ~$4,605 |
| Kentucky | Flat 3.5% | ~$2,507 | ~$5,132 |
| Michigan | Flat 4.25% | ~$2,937 | ~$6,124 |
Note: Ohio figures show state tax only (single filer, wages only, computed with the $332 base amount) and do not include municipal or school district layers. For example, Columbus's 2.5% municipal tax adds about $3,750 on $150,000 of wages.
Social Security benefits are fully exempt from Ohio state income tax. Ohio public pension income (OPERS, STRS Ohio) and private pension and IRA/401(k) distributions are generally taxable, offset only by a Retirement Income Credit of up to $200 per return. Military retirement pay is fully exempt from Ohio income tax.
The School District Income Tax is one of Ohio’s most distinctive and often overlooked tax layers. Ohio law allows individual school districts to levy their own income tax on residents within the district — entirely separate from state income tax and municipal income tax. Roughly 210 Ohio school districts levy an SDIT (Ohio Legislative Service Commission, FY 2025).
You must know the four-digit school district number for your Ohio address to determine whether you owe SDIT and at what rate. The Ohio Department of Taxation maintains a lookup tool at tax.ohio.gov. Common examples:
If you move during the tax year, you may owe SDIT to more than one district on a pro-rata basis. The SDIT is a common source of surprise tax bills for Ohioans who move between districts mid-year or who recently moved to Ohio without realizing their new address falls within an SDIT district.
Nearly every incorporated municipality in Ohio levies its own income tax on residents and on employees who work within city limits. This is in addition to both state income tax and any applicable SDIT. Ohio municipal income taxes are administered by RITA (Regional Income Tax Agency), CCA (Central Collection Agency), or by individual cities directly.
| City | Resident Rate | Non-Resident (Working) Rate | Notes |
|---|---|---|---|
| Columbus | 2.5% | 2.5% | Credit for work-city tax varies by city |
| Cleveland | 2.5% | 2.5% | Credit for work-city tax varies by city |
| Cincinnati | 1.8% | 1.8% | Credit up to 1.8% for tax paid elsewhere |
| Akron | 2.5% | 2.5% | Credit for work-city tax varies by city |
| Dayton | 2.5% | 2.5% | Credit for work-city tax varies by city |
| Toledo | 2.5% | 2.5% | Credit available for tax paid elsewhere |
Many Ohio municipalities give a credit against your resident-city tax for income tax paid to the municipality where you work, but the size of the credit varies by city. As an illustration only: if a resident city with a 2.5% rate gave a full credit for 2% paid to a work city, you would owe the resident city only the remaining 0.5%. Verify your specific cities’ rules.
Under Ohio’s 20-day (occasional entrant) rule, a nonresident employee who works in a municipality 20 or fewer days in a calendar year is generally not subject to that city’s income tax or withholding for that work. For remote workers who occasionally commute to an employer’s Ohio office, this rule can reduce the number of days you’re subject to the office city’s tax.
Ohio’s effective property tax rate averages approximately 1.36% (Tax Foundation, 2024 data), the 8th highest of the 50 states. Property taxes in Ohio are levied by counties, municipalities, school districts, and special districts, which means rates vary significantly by location. Cuyahoga County (Cleveland area) consistently has some of Ohio’s highest rates.
| County | Approximate Effective Rate | Annual Tax on $250,000 Home |
|---|---|---|
| Cuyahoga (Cleveland) | ~1.89% | ~$4,725 |
| Franklin (Columbus) | ~1.53% | ~$3,825 |
| Hamilton (Cincinnati) | ~1.51% | ~$3,775 |
| Summit (Akron) | ~1.49% | ~$3,725 |
| Delaware (Columbus suburb) | ~1.60% | ~$4,000 |
Ohio provides an owner-occupancy property tax reduction for primary residences (historically 2.5% of the tax on eligible levies); H.B. 96 (2025) lets counties double the reduction, so check your county auditor for the current amount.
Ohio’s state sales tax rate is 5.75%. Each of Ohio’s 88 counties adds a county sales tax rate, typically bringing the total to 7–8%. For example, Cuyahoga County (Cleveland) has an 8% combined rate. Franklin County (Columbus) is 7.5%. Food for home consumption (groceries) is generally exempt from Ohio sales tax. Prepared food (restaurant meals) is taxable.
Ohio repealed its state estate tax effective January 1, 2013. Prior to repeal, Ohio had an estate tax with a $338,333 threshold — one of the lowest in the country. Since 2013, Ohio residents are subject only to the federal estate tax (2026 exemption: $15M per individual, OBBBA — up from $13.99M in 2025 and made permanent). This makes Ohio significantly more favorable for estate planning than neighboring states like Pennsylvania, which still imposes an inheritance tax.
Ohio has no inheritance tax. Pennsylvania, by contrast, levies an inheritance tax of 4.5–15% on assets inherited by most beneficiaries (excluding spouses). The absence of any Ohio death tax is a notable benefit over several neighboring states.
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Ohio’s three-layer tax system — state income tax, municipal income tax, and School District Income Tax — is one of the most complex in the country; TaxHub connects you with licensed CPAs who can navigate all three.
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