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Ohio Tax Guide: State & Local Income Taxes

Navigate Ohio's reduced income tax rates, municipal taxes, and overall tax landscape for the 2025 tax year.

3.5%
Top State Income Rate
0.5-3.0%
Local Income Tax
7.24%
Combined Sales Tax
1.53%
Property Tax Rate

Tax Overview

Ohio has been steadily reducing its income tax rates, with the current top rate at approximately 3.5% on income above $115,300. The first $26,050 of income is tax-free. Ohio has eliminated the bottom bracket entirely and consolidated its system, making it much more competitive than it was a decade ago. The state is unusual in having widespread municipal income taxes, with most cities and villages levying their own local income tax.

Ohio's municipal income tax system is extensive, with over 600 cities and villages imposing local income taxes at rates ranging from 0.5% to 3% (Columbus and several other cities charge 2.5%). These local taxes are levied on earned income and are typically withheld by employers. Many municipalities offer credits for taxes paid to other jurisdictions, but the complexity can be significant for residents who live in one city and work in another.

Sales tax in Ohio has a state rate of 5.75% with county additions that push the combined rate above 7% in most areas and as high as 8% in some counties. Groceries and prescription drugs are exempt. Property taxes in Ohio are above average, with effective rates around 1.53%. The state offers a homestead exemption for seniors age 65+ and permanently disabled residents that reduces the taxable value of their home.

Income Tax

Ohio has dramatically reduced its income tax rates. Most cities also levy local income taxes of 0.5%-3% on earned income, significantly increasing the total burden.

Income RangeTax Rate
$0 – $26,0500%
$26,051 – $100,0002.75%
$100,001 +3.50%

Sales Tax

State Rate5.75%
Avg. Local Rate1.49%
Combined Rate7.24%

Property Tax

Effective Rate1.53%
Median Annual Bill$2,836

Key Deductions in Ohio

  • ✓First $26,050 of income exempt from Ohio income tax
  • ✓Retirement and pension income credit
  • ✓Senior citizen homestead exemption (up to $26,200 of home value)
  • ✓Joint filing credit for two-income households
  • ✓Ohio 529 plan contribution deduction (up to $4,000 per beneficiary)
  • ✓Lump sum retirement income credit

Filing Information

Filing Deadline: April 15

Tax Authority: Ohio Department of Taxation

Phone: (800) 282-1780

Website: https://tax.ohio.gov

Frequently Asked Questions

How do Ohio municipal income taxes work?
Over 600 Ohio cities and villages levy local income taxes on earned income at rates from 0.5% to 3%. These are separate from state income tax and are typically withheld by employers. If you live and work in different cities, you may owe tax to both, though credits usually offset double taxation.
Does Ohio tax retirement income?
Ohio provides credits for retirement and pension income that can significantly reduce the tax on retirement distributions. Social Security benefits are fully exempt from Ohio income tax. The retirement income credit can offset much of the state tax on other retirement income.
Has Ohio been reducing its income tax?
Yes, Ohio has dramatically reduced its income tax rates over the past decade. The top rate has dropped from over 5% to 3.5%, and the zero-bracket threshold has been raised. Ohio has also eliminated several lower brackets.
What is the Ohio homestead exemption?
Ohio offers a homestead exemption for residents age 65 and older and permanently disabled individuals, regardless of income. The exemption reduces the taxable value of the home by up to $26,200, providing meaningful property tax savings.

Neighboring State Guides

MichiganIndianaKentuckyWest VirginiaPennsylvania

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