Ohio has undergone significant tax reform, including changes to personal income tax rates and brackets for 2023 and 2024. Understanding what Ohio State Income Tax entails requires understanding all these changes.
The state encourages homeownership through deductions for contributions to homeownership savings accounts. Relief payments related to a train derailment are deductible for individual taxpayers. Ohio allows residents to claim credit for pass-through entity taxes paid to other states.
The Commercial Activity Tax (CAT) exclusion amount will increase, and changes have been made to the R&D tax credit. Sports gaming receipts will face a higher tax rate from July 1, 2023. Certain children’s items will become sales tax-exempt, and an elective factor sourcing model has been introduced for municipal net profit tax purposes.
Does Ohio Have a State Income Tax?
Yes, Ohio has a state income tax. Ohio imposes a state income tax on the income of its residents and non-residents who earn income within the state’s borders. The state’s income tax rates are progressive, with multiple tax brackets and rates ranging from 0.5% to 4.99% as of 2023.
These rates can change over time due to legislative actions. Ohio residents and individuals who earn income in Ohio are required to file state income tax returns, and the revenue generated from this tax helps fund various state programs and services.
Ohio State Income Tax – How much will the income after tax in Ohio with Filing Status
| Annual Income | Filing Status – Single | Filing Status – Married Filing Jointly | Filing Status – Head of Household |
| $12000 | $12,000 | $12,000 | $12,000 |
| $15000 | $14,795 | $15,000 | $15,000 |
| $20000 | $19,295 | $20,000 | $19,940 |
| $22000 | $21,095 | $22,000 | $21,740 |
| $30000 | $28,088 | $29,584 | $28,934 |
| $35000 | $32,349 | $33,946 | $33,277 |
| $36000 | $33,201 | $34,818 | $34,129 |
| $42000 | $38,315 | $40,052 | $39,243 |
| $45000 | $40,872 | $42,669 | $41,800 |
| $48000 | $43,423 | $45,255 | $44,357 |
| $52000 | $46,814 | $48,651 | $47,753 |
| $54000 | $50,077 | $52,041 | $51,143 |
| $60000 | $53,068 | $55,432 | $54,534 |
| $62000 | $54,563 | $57,128 | $56,230 |
| $65000 | $56,806 | $59,671 | $58,773 |
| $70000 | $60,545 | $63,909 | $63,011 |
| $75000 | $64,283 | $68,148 | $67,250 |
| $80000 | $72,386 | $72,386 | $71,018 |
| $85000 | $71,760 | $76,625 | $74,757 |
| $90000 | $75,499 | $80,863 | $78,495 |
| $92000 | $76,989 | $82,559 | $79,991 |
| $95000 | $79,218 | $85,094 | $82,226 |
| $114000 | $93,095 | $100,658 | $96,234 |
| $115000 | $93,815 | $101,401 | $96,957 |
| $140000 | $111,817 | $119,905 | $114,961 |
| $150000 | $119,018 | $127,306 | $122,162 |
| $160000 | $126,219 | $134,707 | $129,363 |
| $165000 | $129,820 | $138,407 | $132,963 |
| $190000 | $147,262 | $156,910 | $150,921 |
| $185000 | $144,062 | $153,209 | $147,365 |
| $260000 | $191,136 | $207,598 | $194,989 |
| $300000 | $215,540 | $236,402 | $219,393 |
| $350000 | $246,045 | $272,407 | $249,898 |
| $120000 | $97,415 | $105,103 | $100,559 |
| $135000 | $108,217 | $116,204 | $111,360 |
| $170000 | $133,420 | $142,108 | $136,564 |
| $180000 | $140,621 | $149,509 | $143,765 |
| $250000 | $185,035 | $200,397 | $188,888 |
| $28000 | $26,383 | $27,790 | $27,140 |
| $32000 | $29,792 | $31,329 | $30,679 |
| $40000 | $36,611 | $38,307 | $37,539 |
| $44000 | $40,020 | $41,797 | $40,948 |
| $53000 | $47,661 | $49,498 | $48,600 |
| $56000 | $50,077 | $52,041 | $51,143 |
| $58000 | $51,572 | $53,737 | $52,839 |
Ohio State Income Tax Rates And Tax Brackets
Ohio’s state income tax rates and tax brackets are structured to be progressive, meaning that higher-income individuals are subject to higher tax rates. As of 2023, Ohio has five tax rates, ranging from 0% to 3.99%. Here’s how these rates break down based on taxable income:
- 0%: This rate applies to individuals with taxable income from $0 to $26,050. No income tax is owed in this bracket, providing a tax break for lower-income residents.
- 2.76%: Taxable income between $26,051 and $46,100 falls into this bracket. Taxpayers in this range owe $360.69 plus 2.76% over $26,050.
- 3.22%: For incomes between $46,101 and $92,150, individuals must pay $915.07 plus 3.22% of the income exceeding $46,100.
- 3.68%: Those with taxable income from $92,151 to $115,300 owe $2,400.64 plus 3.68% over $92,150.
- 3.99%: The highest tax rate, 3.99%, applies to individuals earning $115,301 or more. They are required to pay $3,254.41 plus 3.99% of the income exceeding $115,300.
These tax brackets help determine the amount of state income tax Ohio residents owe based on their income levels to make the tax system more equitable. Taxpayers in Ohio need to be aware of these rates to ensure accurate filing and payment of their state income taxes.
Also Read: Michigan State Income Tax
What Is Ohio’s Standard Deduction?
Ohio’s income tax system differs from the federal one because it does not offer a standard deduction. Instead, Ohio taxpayers are allowed deductions based on federal adjusted gross income or specific Ohio adjustment modifications. Individuals who choose to itemize deductions for federal tax reporting may encounter variations in their taxable income regarding Ohio state income taxes.
To determine their Ohio taxable income, residents should carefully consider the deductions provided at the federal level and any additional adjustments specified by Ohio tax laws. Taxpayers need to be aware of these distinctions to accurately calculate their state income tax liability, as it can result in differences compared to their federal tax obligations.
Also Read: South Carolina State Income Tax
How To Calculate Ohio State Income Tax?
Calculating Ohio state income tax involves considering your taxable income, filing status, and applicable deductions and credits. Ohio uses a progressive tax system with five tax rates ranging from 0% to 3.99%. Here’s a step-by-step guide:
- Determine Taxable Income: Start by determining your taxable income. It includes your total income from all sources minus any allowable deductions.
- Identify Filing Status: Ohio offers different tax brackets for various filing statuses, including single, married, filing jointly, and head of household. Choose the one that applies to your situation.
- Apply Tax Rates: Once you know your taxable income and filing status, apply the corresponding tax rates to calculate the initial tax liability.
- Consider Deductions and Credits: Ohio allows deductions and credits that can reduce your tax liability. These may include exemptions, credits for dependents, and deductions for certain expenses.
- Calculate the Final Tax: Subtract any deductions and credits from your initial tax liability to determine your final Ohio state income tax.
- File Your Tax Return: Complete and file your Ohio state income tax return by the annual deadline, typically April 15.
Do I Have To Pay Ohio State Income Tax?
Yes, Ohio residents generally must pay Ohio state income tax if taxable income meets the state’s filing requirements. Taxable income can come from various sources, including employment, self-employment, investments, and rental income.
The specific income thresholds, deductions, and credits that apply can vary depending on factors like filing status and personal circumstances. To determine whether you need to pay Ohio state income tax and how much you owe, it’s advisable to review the state’s tax guidelines or consult with a tax professional for accurate and up-to-date information tailored to your situation.
Also Read: Colorado State Income Tax
How To Pay Ohio State Income Tax?
There are convenient options available as outlined by the Ohio Department of Taxation to pay Ohio state income taxes.
- Online Payment: You can make payments online using a debit or credit card by visiting the Official Payments website. This method offers a quick and secure way to fulfill your tax obligations.
- Phone Payment: Another option is to pay your Ohio state income tax by calling the department. This phone payment method allows you to charge the tax payment to your credit card and provides a confirmation number for your records.
These accessible payment methods aim to make paying Ohio state income taxes convenient and efficient for taxpayers. Be sure to have the necessary payment information and details ready when using these methods to ensure accurate and timely payments.
Always consult with a tax professional or looking for Online tax assistance like Beem provides online.
Am I A Resident For Ohio Income Tax Purposes?
Your living situation determines your Ohio residency for income tax purposes during the tax year. Here’s how it breaks down:
- A resident of Ohio: If you lived in Ohio for the entire year, you are considered a resident for Ohio income tax purposes. This status applies to individuals who had their domicile in Ohio throughout the tax year.
- A non-resident of Ohio: Individuals who were not domiciled in Ohio for the entire tax year and had no more than 212 contact periods in Ohio during that year are classified as non-residents for Ohio income tax purposes.
- Part-Year Resident of Ohio: If you moved into or out of Ohio during the tax year, you fall into the category of a part-year resident for Ohio income tax purposes.
Where Is My Ohio State Income Tax Refund?
To check the status of your Ohio state tax refund, you have two convenient options:
Online Method:
- Visit the Ohio Department of Taxation website.
- Provide the required information: Your Social Security number, Date of birth, and Type of tax return (original or amended)
- Click “Submit” to access your Ohio refund status.
Phone Method:
- Call the Ohio Refund Hotline.
- Follow the prompts and provide the necessary information.
For taxpayers who opted for direct deposit with their original return, refunds are typically processed and received within 15 business days. On the other hand, paper returns may take approximately eight to 10 weeks for processing.
Several factors can contribute to a delay in receiving your Ohio refund, including errors on your tax return, outstanding unpaid assessments, owing money to the IRS, owing back child support, or having outstanding debts related to public assistance overpayments.
If your refund hasn’t arrived within the expected timeframe, it’s advisable to use the “Check My Refund Status” option on the Ohio Department of Taxation’s website to investigate further.
Also Read: Georgia State Income Tax
Why Did My Ohio State Income Tax Increase?
Despite Ohio’s recent income tax cut, some middle-class taxpayers may see an increase in their income taxes due to the state’s “graduated income tax” system. In this system, taxpayers are subject to different tax rates as their income increases. While the state government has emphasized reducing income tax rates, analysts suggest that the changes could lead to higher taxes for middle-class Ohioans in the coming years.
The intricacies of the new tax structure, including adjustments to tax brackets and rates, might inadvertently result in higher tax liabilities for certain income groups. Despite intentions to reduce taxes, these changes could lead to increased payments for middle-income individuals and families, highlighting the complexities and potential pitfalls of tax reform efforts.
Ohio Sales Tax
Sales Tax is a consumption-based tax levied on selling goods and certain services. In Ohio, the state imposes a sales tax rate of 5.75 percent. Additionally, local jurisdictions can impose their own sales taxes, with a maximum rate of 2.25 percent.
When combined, Ohio’s average sales tax rate, encompassing state and local taxes, is 7.24 percent. It’s important to note that sales tax rates can vary from one locality to another within the state. Ohio’s overall tax system ranks 37th on the 2023 State Business Tax Climate Index, reflecting its approach to taxation and its impact on businesses and consumers.
5 Things To Know About Ohio Income Tax
Here are the five most important things to know about Ohio income tax:
- Progressive Tax Rates: Ohio uses a progressive tax system, meaning tax rates increase with higher income levels. It has multiple tax brackets, with rates ranging from 0% to 3.99% as of 2023.
- Tax-Friendly to Retirees: Ohio is considered tax-friendly for retirees. It doesn’t tax Social Security benefits, provides a generous retirement income credit, and offers property tax relief for seniors.
- Credits for Out-of-State Income: Ohio residents with income earned in other states may be subject to taxation by Ohio and the other state. However, Ohio offers a credit to prevent double taxation.
- Potential for Tax Rate Changes: Ohio’s income tax rates can change through legislative actions, so staying informed about tax law updates is important.
- CAT for Businesses: Ohio imposes the Commercial Activity Tax (CAT) on businesses based on gross receipts instead of traditional income taxes. It simplifies tax obligations for LLCs and other business entities.
These key points provide a foundational understanding of the Ohio State Income Tax system and its implications for residents, retirees, and businesses.
Remember, you can file personal tax online for both Federal and state, even if you have worked in multiple states or have multiple W-2s. It’s easy and can be done.
FaQs
Q. Is Ohio a high-tax state?
A. Ohio is not considered a high-tax state; it falls in the moderate range for overall taxation, offering a balanced tax environment.
Q. Is Ohio a tax-friendly state?
A. Ohio is tax-friendly for many, thanks to exemptions like no taxation on Social Security income, making it an attractive option for retirees.
Q. Is Ohio an excellent place to live for taxes?
A. Ohio’s tax attractiveness varies based on individual financial situations, with opportunities for tax savings through deductions and credits.
Q. How much of my paycheck goes to taxes in Ohio?
A. The percentage of your paycheck going to Ohio taxes depends on your income and deductions, with rates varying across different income levels.
Q. Is Ohio tax income earned in another state?
A. Ohio may tax out-of-state income but offers credits to avoid double taxation, making it manageable for residents with income from multiple states.
Q. Does Ohio tax Social Security income?
A. Ohio does not tax Social Security income, providing financial relief to retirees.
Q. Can Ohio state income tax rates increase?
A. Ohio’s state income tax rates can change through legislative decisions, so staying updated on tax law changes is essential.
Q. Do seniors have to pay state income tax in Ohio?
A. Seniors in Ohio can benefit from specific tax exemptions and credits, contributing to a more tax-friendly environment for retirees.
Q. Does Ohio have a state income tax for the military?
A. Ohio’s state income tax for military personnel depends on residency and income sources, potentially offering tax advantages for service members.
Q. What are Ohio’s state income taxes for LLCs?
A. Ohio imposes the Commercial Activity Tax (CAT) on LLCs based on gross receipts rather than traditional income taxes, simplifying tax obligations for businesses.
