Login
Ohio Taxes: What You Need to Know
Ohio moved to a flat income tax structure in 2026. The state now applies a flat rate of 2.75% to all income above $26,050, with income at or below that threshold taxed at 0%. This means the state has moved away from its previous multi-bracket system and now uses just two effective rates 0% and 2.75% for W-2 wage earners and most individual filers. The change was enacted through House Bill 96, signed by Governor Mike DeWine on June 30, 2025, and applies to tax year 2026 and beyond.
Additionally, many cities and villages in Ohio impose their own municipal income taxes, with nearly 400 municipalities participating through the Regional Income Tax Agency (RITA). This means your wages will also likely be subject to a local income tax rate.
Here’s a detailed description of the various tax withholdings and deductions in Ohio, followed by a table summarizing the tax percentages:
Federal, State, and Local Tax Withholding
- Federal Tax Withholding: Employers withhold federal income tax based on the employee’s W-4 form, which includes information about filing status and number of dependents. The federal tax rates range from 10% to 37%. These rates were permanently extended by the One Big Beautiful Bill Act (P.L. 119-21) signed in 2025.
Source: IRS Publication 15 (Circular E), Employer’s Tax Guide 2026 — irs.gov
- State Tax Withholding: Ohio now uses a flat income tax structure. Income up to $26,050 is taxed at 0%. All income above $26,050 is taxed at a flat rate of 2.75%. This applies to W-2 wages and most non-business income. Business income is taxed at a separate rate of 3.0%, with the first $250,000 exempt.
Source: Ohio HB 96 — plantemoran.com
- Local Tax Withholding: Many cities and villages in Ohio impose their own local income taxes, generally ranging from 0.50% to 3%. Employees owe tax to the city where they work. Depending on their municipality, they may also owe a residence tax to the city where they live, though most cities offer a credit for taxes paid to the work city.
Source: RITA — Municipal Income Tax Facts — ritaohio.com
FICA & State Insurance Taxes
- FICA Taxes: These include Social Security and Medicare taxes. The Social Security tax rate is 6.2% on earnings up to $184,500 for 2026. The Medicare tax rate is 1.45% on all earnings. An additional 0.9% Medicare tax applies to earnings over $200,000, which employers are required to withhold automatically once wages cross that threshold.
Source: IRS Topic 751 — Social Security and Medicare Withholding Rates — irs.gov
- State Insurance Taxes: These may include unemployment insurance and workers’ compensation. The specific rates can vary based on employer classification and claims history.
Pre-Tax Deductions
- Medical Insurance: Premiums for health insurance plans are often deducted from an employee’s paycheck before taxes are applied, reducing taxable income.
- 401(k) Contributions: Contributions to a 401(k)-retirement plan are pre-tax, meaning they are deducted from gross income before taxes are calculated. For 2026, the IRS increased the 401(k)-contribution limit to $24,500, up from $23,500 in 2025.
Source: IRS — 401(k) limit increases to $24,500 for 2026 — irs.gov
- Other Pre-Tax Deductions include contributions to Health Savings Accounts (HSAs), Flexible Spending Accounts (FSAs), and transportation benefits.
Tax Percentage Table
| Tax Type | Percentage |
|---|---|
| Federal Income Tax | 10% – 37% |
| Ohio State Income Tax | 0% (up to $26,050) / 2.75% flat (above $26,050) |
| Local Income Tax | 0.50% – 3% |
| Social Security Tax | 6.2% (up to $184,500) |
| Medicare Tax | 1.45% (additional 0.9% over $200,000) |
| Unemployment Insurance | Varies |
| Workers’ Compensation | Varies |
| 401(k) Contributions | Up to $24,500 (pre-tax) |
| Health Insurance Premiums | Varies (pre-tax) |
Sources: IRS Topic 751 | IRS 401(k) 2026 Limits | RITA Tax Facts | Ohio HB 96
Median Household Income in Ohio
According to Statista, in 2023, the median household income in Ohio was $73,770. This was an increase from the previous year when it was $67,520, and it has been increasing since 1990.
Ohio Tax Brackets 2026
Ohio’s 2025–2026 budget eliminated all income tax brackets for individual taxpayers and replaced them with a single flat rate. Here is a summary of the Ohio state income tax structure for 2026: Source: Ohio HB 96 Summary — plantemoran.com
| Income Range | Tax Rate |
|---|---|
| $0 – $26,050 | 0% |
| Over $26,050 | 2.75% (flat) |
These brackets apply to single filers, married filing jointly, and head of household filers. Note: business income is taxed separately at 3.0%, with the first $250,000 of business income exempt.
For a better understanding, let’s calculate the Ohio state income tax for an individual earning $50,000 in 2026.
Income Range: $0 – $26,050
Tax Rate: 0%
Tax: $26,050 × 0% = $0
Income Range: $26,050 – $50,000
Tax Rate: 2.75%
Tax: ($50,000 – $26,050) × 2.75% = $23,950 × 2.75% = $658.63
Total Tax: $0 (first range) + $658.63 (second range) = $658.63
So, an individual earning $50,000 in Ohio would pay approximately $658.63 in state income tax for 2026. This is a slight decrease from the 2024 calculation of $681.36, because the flat 2.75% rate is lower than the previous brackets that applied to income between $46,100 and $50,000.
