Ohio's New Flat 2.75%, With the First $26,050 Untaxed
As of January 1, 2026, Ohio taxes nonbusiness income at a flat 2.75%, and the first $26,050 of income is exempt entirely. A single filer earning $80,000 owes about $1,484 to the state, low by national standards, and the result of a multi-year effort that collapsed Ohio's old graduated brackets into a single rate. On the state line alone, Ohio looks like one of the gentler income-tax states in the country.
The Real Ohio Tax Story Is Local
Ohio's complexity lives at the municipal level. Nearly every Ohio city levies its own income tax, commonly 2% to 2.5%: Columbus, Cleveland, Toledo, and Akron each charge 2.5%, while Cincinnati charges 1.8%. On an $80,000 salary, the Columbus city tax alone is $2,000, more than the $1,484 you owe the state. In Ohio it is routine for your municipal income tax to exceed your state income tax, which is why the state rate badly understates what actually comes out of an Ohio paycheck.
Work City vs. Residence City
Ohio taxes the city where you physically work, and your city of residence may tax you as well, usually granting a partial credit for tax paid to your work city. Many municipalities collect through RITA (the Regional Income Tax Agency) or the CCA. For hybrid and remote workers this matters: where you actually perform the work now decides which city gets your tax, a real shift from the temporary rules that applied during the pandemic. Two people with identical salaries can owe different cities depending on where their desk is.
Don't Forget School District Income Tax
On top of city tax, some Ohio school districts levy their own income tax, often 0.25% to 2%, on residents, billed separately from municipal tax. Whether you owe one depends on your exact school district rather than your city, so two neighbors a few blocks apart can face different total rates. It is a uniquely Ohio wrinkle that catches new residents off guard, and it is easy to miss when you only look at the state and city rates.
Putting the Ohio Layers Together
A full Ohio paycheck picture stacks three potential layers: the flat 2.75% state tax (above $26,050), a municipal income tax of often 2% to 2.5%, and possibly a school district income tax. The state piece is small; the local pieces usually dominate. Select your city in the calculator above so the municipal rate is applied correctly, relying on the state rate alone will badly overstate your Ohio take-home pay.
How Ohio Got to a Flat 2.75%
Ohio's flat rate is the end of a long downhill slide. The state used to run a nine-bracket schedule topping out near 5.9%; over the past decade it cut rates and collapsed brackets repeatedly, dropping the top rate to 3.99%, then 3.5% for 2024, then 3.125% for 2025, and finally a single flat 2.75% on income above $26,050 for 2026 (Ohio Department of Taxation). The first $26,050 of income is exempt entirely, so the lowest earners owe no state income tax at all. By state-rate standards Ohio is now one of the gentler income-tax states, which is exactly why the local layer, not the state schedule, decides what most Ohioans actually keep.
Setting Withholding and Filing: IT-4 and IT-1040
You set your Ohio withholding on Form IT-4, the employee's withholding exemption certificate, and file the IT-1040 state return by April 15 through the Ohio Department of Taxation's OH|TAX portal. The state return is the easy part. The complication is municipal: even when your employer correctly withholds your work-city tax, you may still need to file a separate municipal return, often through RITA (the Regional Income Tax Agency) or the CCA (Central Collection Agency), which administer income tax for hundreds of Ohio cities. Whether you owe a balance or not, the city generally still wants the return filed.
The Double-City Trap Most Ohioans Miss
Here is the mistake that generates the most surprise notices in Ohio: forgetting that you can owe two municipal returns. Your employer withholds for the city where you work, but the city where you live may also tax you, usually granting a partial credit for tax paid to the work city. If those rates differ, you can owe your residence city the difference, and you generally must file a residence-city return to claim the credit or settle up, often via RITA or CCA. People who move between Ohio cities, or who work in one and live in another, routinely miss the residence-city filing and hear about it later. Retirement income is generally not subject to municipal tax, which only reaches earned wages.
Ohio and Retirement Income
At the state level, Ohio exempts Social Security entirely and offers a (modest) retirement income credit, though pensions and 401(k)/IRA withdrawals are otherwise taxed at the flat 2.75%. The bigger break for retirees is local: Ohio municipal income taxes apply to earned wages, not to pensions, Social Security, or retirement-account distributions, so a retiree in a 2.5% city pays that rate on nothing once the paychecks stop. Between the low flat state rate and the local exemption for retirement income, Ohio treats retirees considerably better than its working-age residents.
Social Security and Medicare (FICA) are federal, so they come out the same in Ohio as in every other state. The main Paycheck Calculator walks through the full federal side, including the Social Security wage base and the Additional Medicare surtax.