What Is the State Income Tax Rate in Ohio?

Ohio levies a state income tax on individual residents and non-residents who earn income within its borders. This tax funds various state services and programs. Understanding Ohio’s income tax structure, including how income is calculated, applicable rates, and available credits, helps taxpayers navigate their obligations.

Ohio State Income Tax Rates and Brackets

Ohio employs a progressive income tax system. For the 2024 tax year, which taxpayers will file in 2025, Ohio’s state income tax system features three tax brackets.

For taxable nonbusiness income up to $26,050, the tax rate is 0%. Income from $26,051 to $100,000 is taxed at 2.75%, plus $360.69. For income exceeding $100,000, the rate increases to 3.5%, plus a higher flat amount.

Calculating Ohio Taxable Income

The process of determining Ohio taxable income begins with an individual’s Federal Adjusted Gross Income (AGI) as reported on federal Form 1040. This federal AGI is then adjusted by specific Ohio additions and subtractions to arrive at Ohio Adjusted Gross Income (OAGI). Additions can include non-Ohio state or local government interest and certain depreciation adjustments.

Common subtractions from federal AGI include certain interest and dividends from U.S. obligations, military pay earned by Ohio residents stationed outside the state, and contributions to an Ohio CollegeAdvantage 529 savings account, up to specific limits. Amounts contributed to Ohio Homebuyer Plus accounts, along with any interest earned, may also be deducted. After calculating OAGI, personal and dependent exemptions are subtracted to determine the final Ohio taxable income.

Ohio Income Tax Credits

Ohio tax credits directly reduce the state income tax owed, providing a dollar-for-dollar reduction. Unlike deductions that lower taxable income, credits directly decrease the tax liability.

The Ohio Earned Income Tax Credit (EITC) is 30% of the federal credit amount for those who qualify. A Senior Citizen Credit of $50 can be claimed by taxpayers aged 65 or older by December 31 of the tax year. A Retirement Income Credit can provide up to a $200 reduction for individuals receiving certain retirement income. A Personal and Dependent Exemption Credit of $20 per exemption claimed on the Ohio return is available to all individual filers.

Ohio Municipal Income Taxes

Many Ohio cities and villages levy their own income taxes, independent of the state tax. These municipal taxes are based on where an individual lives or earns income. Rates vary significantly by municipality, generally from 0.5% to 3%.

Taxpayers living in one municipality and working in another may face obligations in both. To mitigate this, many municipalities offer tax credits or reciprocity agreements. A credit for taxes paid to a work municipality can reduce the tax owed to the resident municipality, preventing double taxation. Taxpayers should verify specific rates and credit rules for their residential and employment municipalities.

Filing Your Ohio Tax Return

Most full-year and part-year Ohio residents must file an Ohio tax return if they earned income in the state. Nonresidents are also required to file if they have Ohio-sourced income. Exceptions apply if Ohio Adjusted Gross Income is $0 or less, or if certain credits eliminate the tax liability.

The annual deadline for filing Ohio individual income tax returns (Form IT 1040) is typically April 15th, aligning with the federal tax deadline. If this date falls on a weekend or holiday, the deadline shifts to the next business day. Electronic filing is available through Ohio’s OH|TAX eServices, a free and secure online portal. Taxpayers can also use commercial tax software or mail paper forms. An extension to file is granted if a federal extension is filed, but this does not extend the deadline for tax payments, which remain due by April 15th.