Ohio collects state income tax from most workers and retirees
Yes, Ohio has a state income tax. The state taxes wages, retirement income, interest, dividends, and other forms of income. The tax rate varies depending on your income level — Ohio uses a progressive tax system with brackets that range from 0.5% to 5.75%, though the exact rate you pay depends on which bracket your income falls into.
Not all income is taxed the same way in Ohio. Some types of income are partially or fully exempt, and certain people may not have to file a state return even if they live in Ohio. Understanding what Ohio taxes and what it doesn't can affect how much you owe and whether you need to file.
Key Takeaways
- Ohio taxes wage income, retirement distributions, interest, and dividends using tax brackets that range from 0.5% to 5.75%.
- Social Security benefits are not taxed by Ohio, and military pensions receive a partial exemption up to a certain amount.
- You must file an Ohio state return if your income exceeds the filing threshold, which varies by age and filing status.
- Ohio allows a tax credit for taxes paid to other states, so you won't pay double tax on the same income if you worked out of state.
Ohio tax brackets and rates for 2024
Ohio's income tax uses a progressive system, meaning the rate increases as your income rises. The state has eight tax brackets, starting at 0.5% on the lowest incomes and reaching 5.75% on the highest. You do not pay the top rate on all your income — only the portion that falls within each bracket is taxed at that rate.
The exact dollar amounts for each bracket depend on your filing status (single, married filing jointly, married filing separately, or head of household). The brackets are adjusted each year for inflation. To find the current brackets that explore to your situation, you can check the Ohio Department of Taxation website or use the tax tables they publish with each year's instructions.
Your employer withholds Ohio income tax from your paycheck based on the W-4 form you complete. If too much is withheld, you receive a refund when you file. If too little is withheld, you owe the difference when you file your return.
What types of income Ohio taxes
Ohio taxes most forms of income, including wages from employment, self-employment income, interest earned on savings accounts and bonds, and dividends from stocks. If you receive rental income or income from a business you own, that is also subject to Ohio tax.
Retirement income is taxed differently depending on the source. Distributions from traditional IRAs and 401(k) plans are taxed as ordinary income. Pension income from a private employer is also taxable. However, military pensions and certain other government pensions receive special treatment — Ohio allows a partial exemption for military retirement pay and some public employee pensions, though the amount varies.
Capital gains (profit from selling stocks or property) are taxed as ordinary income in Ohio. Long-term capital gains do not receive preferential tax treatment at the state level, unlike the federal system.
Income that Ohio does not tax
Social Security benefits are not taxed by Ohio, even if they make up a large portion of your income. This applies to retirement benefits, survivor benefits, and disability benefits paid by Social Security.
Certain other types of income are also exempt. These include workers' compensation, some disability income, and certain scholarships and educational grants. Interest from U.S. Treasury bonds and bills is exempt from Ohio tax (though it is still subject to federal tax). Municipal bond interest is also exempt.
If you receive income from sources outside Ohio, you may still owe Ohio tax on that income if you are an Ohio resident. However, Ohio allows a credit for taxes paid to other states, which prevents you from paying tax twice on the same income.
Who must file an Ohio state income tax return
You must file an Ohio return if your income exceeds the filing threshold for your age and filing status. For 2024, a single person under 65 with less than $11,900 in income generally does not have to file. The threshold is higher if you are 65 or older, and it varies if you are married or filing as head of household.
Even if your income is below the threshold, you may want to file if you had taxes withheld from your paycheck or if you are may have access to to refundable credits. Filing allows you to recover any overpayment. Self-employed people should file if their net self-employment income is $400 or more, regardless of the income threshold.
If you are claimed as a dependent on someone else's return, the filing threshold is different and usually lower. Check the Ohio Department of Taxation website for the specific threshold that applies to your situation.
How to file your Ohio state income tax return
You can file your Ohio return on paper using Form IT 1040 and any required schedules, which you can read from the Ohio Department of Taxation website. You can also file electronically using tax software or through a tax professional.
Ohio offers a free file program for residents with lower incomes. If your income is below a certain threshold (which changes each year), you can use IRS Free File software to prepare your federal and Ohio returns at no cost. The Ohio Department of Taxation website lists which software providers participate.
The important date to file your Ohio return is the same as the federal important date, typically April 15. If you file your federal return late, your Ohio return is also due by that later date. You can request an extension, which gives you until October 15 to file, though any taxes owed are still due by April 15.
Ohio tax credits and deductions
Ohio allows several credits that reduce the amount of tax you owe. The Earned Income Tax Credit (EITC) is available to low- and moderate-income workers and is based on your federal EITC. Ohio also offers credits for property taxes paid, rent paid, and taxes paid to other states.
The state standard deduction reduces your taxable income before you calculate the tax owed. For 2024, the standard deduction varies by filing status and age. You can claim the standard deduction or itemize deductions, though most Ohio residents use the standard deduction because it is simpler and results in a lower tax bill.
If you are over 65, blind, or disabled, you may be may have access to to an additional deduction. Check the Ohio Department of Taxation website or your tax software to see which credits and deductions explore to your situation.
Frequently Asked Questions
Do I have to pay Ohio income tax if I work in Ohio but live in another state?
Yes, you owe Ohio tax on income earned in Ohio even if you live elsewhere. However, the other state may also tax that income. Ohio allows a credit for taxes paid to other states to prevent double taxation. You may need to file returns in both states.
Is military retirement pay taxed in Ohio?
Military pensions receive a partial exemption in Ohio. The amount of the exemption depends on when you retired and your age. Check the Ohio Department of Taxation website or speak with a tax professional to determine how much of your military pension is taxable.
What happens if I don't file an Ohio return when I'm supposed to?
If you owe tax and do not file, Ohio charges penalties and interest on the unpaid amount. The longer the return is late, the larger the penalty grows. If you are owed a refund, there is no penalty for filing late, but you cannot claim the refund after a certain number of years.
Can I file my Ohio return electronically?
Yes, you can file electronically using tax software, through a tax professional, or through Ohio's free file program if you meet the income limits. Electronic filing is faster and reduces errors compared to paper filing.
Does Ohio tax retirement account withdrawals?
Withdrawals from traditional IRAs and 401(k) plans are taxed as ordinary income in Ohio. Roth IRA withdrawals of contributions are not taxed, but earnings may be taxed depending on how long the account has been open. Pension distributions are also taxed unless they may have access to for an exemption.