Ohio’s income tax rate plays a significant role in your financial planning, especially if you’re an entrepreneur or investor aiming to boost your revenue streams. What is Ohio’s income tax rate? Ohio utilizes a graduated income tax system, meaning the rate varies based on your income level. For the 2024 tax year, the lowest bracket starts at 0% for income up to $26,050, while the highest reaches 3.50% for income exceeding $100,000. At income-partners.net, we understand the importance of navigating these rates effectively to maximize your financial opportunities. Explore our platform for innovative strategies to optimize your tax liabilities through strategic partnerships and collaborative ventures, and consider various revenue-generating tactics.
1. Understanding Ohio’s Income Tax System
What is Ohio’s income tax rate all about? Ohio’s income tax system operates on a graduated scale, meaning the percentage of tax you pay increases as your income rises. This approach ensures that individuals with higher incomes contribute a larger share of their earnings to state revenue. Ohio’s income tax applies to individuals, businesses, and other entities operating within the state. This system is designed to fund essential public services, including education, infrastructure, and healthcare.
1.1. How Does the Graduated Tax System Work?
The graduated tax system divides income into different brackets, each taxed at a specific rate. What is Ohio’s income tax rate within each bracket? For example, for the 2024 tax year:
- The first $26,050 of income is taxed at 0%.
- Income between $26,051 and $100,000 is taxed at 2.75%.
- Income over $100,000 is taxed at 3.50%.
This means that only the portion of your income that falls within each bracket is taxed at that specific rate, making the system progressive.
1.2. Key Components of Ohio’s Income Tax
Understanding what is Ohio’s income tax rate also requires familiarity with its key components. These include:
- Taxable Income: This is your adjusted gross income (AGI) minus any deductions and exemptions.
- Tax Brackets: The income ranges to which different tax rates apply.
- Tax Rates: The percentage at which each bracket of income is taxed.
- Deductions: Expenses that can be subtracted from your gross income to reduce your taxable income.
- Exemptions: Fixed amounts that can be deducted for yourself, your spouse, and dependents.
1.3. Tax Credits and Incentives in Ohio
Ohio offers various tax credits and incentives to reduce your tax liability. What is Ohio’s income tax rate affected by credits and incentives? These include credits for:
- Child and Dependent Care: Helps offset the costs of childcare.
- Earned Income: Benefits low- to moderate-income individuals and families.
- Adoption: Assists with the expenses of adopting a child.
- Historic Preservation: Encourages the preservation of historic buildings.
These credits can significantly lower your tax burden, making it essential to understand and utilize them.
2. Ohio’s Income Tax Rates Over the Years: A Historical Overview
To fully grasp what is Ohio’s income tax rate today, it’s helpful to review its historical trajectory. Examining past tax rates provides context and insight into current policies.
2.1. Tax Rates from 2005 to 2024
The following tables outline Ohio’s income tax rates from 2005 to 2024. These rates have varied over the years due to economic conditions and legislative changes.
For taxable years beginning in 2024:
| Ohio Taxable Income | Tax Calculation |
|---|---|
| $0 – $26,050 | 0.000% of Ohio taxable nonbusiness income |
| $26,051 – $100,000 | $360.69 + 2.75% of excess over $26,050 |
| more than $100,000 | $2,394.32 + 3.50% of excess over $100,000 |
For taxable years beginning in 2023:
| Ohio Taxable Income | Tax Calculation |
|---|---|
| $0 – $26,050 | 0.000% of Ohio taxable nonbusiness income |
| $26,051 – $100,000 | $360.69 + 2.75% of excess over $26,050 |
| $100,000- $115,300 | $2,394.32 + 3.688% of excess over $100,000 |
| more than $115,300 | $2,958.58+ 3.750% of excess over $115,300 |
For taxable years beginning in 2022:
| Ohio Taxable Income | Tax Calculation |
|---|---|
| 0 – $26,050 | 0.000% |
| $26,051- $46,100 | $360.69 + 2.765% of excess over $26,050 |
| $46,100- $92,150 | $915.07 + 3.226% of excess over $46,100 |
| $92,150 – $115,300 | $2,400.64 + 3.688% of excess over $92,150 |
| more than $115,300 | $3,254.41+ 3.990% of excess over $115,300 |
For taxable years beginning in 2021:
| Ohio Taxable Income | Tax Calculation |
|---|---|
| 0 – $25,000 | 0.000% |
| $25,001- $44,250 | $346.16+ 2.765% of excess over $25,000 |
| $44,250 – $88,450 | $878.42+ 3.226% of excess over $44,250 |
| $88,450 – $110,650 | $2,304.31+ 3.688% of excess over $88,450 |
| more than $110,650 | $3,123.05+ 3.990% of excess over $110,650 |
For taxable years beginning in 2020:
| Ohio Taxable Income | Tax Calculation |
|---|---|
| 0 – $22,150 | 0.000% |
| $22,151- $44,250 | $316.18+ 2.850% of excess over $22,150 |
| $44,250 – $88,450 | $946.03 + 3.326% of excess over $44,250 |
| $88,450 – $110,650 | $2,416.12 + 3.802% of excess over $88,450 |
| $110,650 – $221,300 | $3,260.16 + 4.413% of excess over $110,650 |
| more than $221,300 | $8,143.14 + 4.797% of excess over $221,300 |
For taxable years beginning in 2019:
| Ohio Taxable Income | Tax Calculation |
|---|---|
| 0 – $21,750 | 0.000% |
| $21,751 – $43,450 | $310.47 + 2.850% of excess over $21,750 |
| $43,450 – $86,900 | $928.92 + 3.326% of excess over $43,450 |
| $86,900 – $108,700 | $2,374.07 + 3.802% of excess over $86,900 |
| $108,700 – $217,400 | $3,202.91 + 4.413% of excess over $108,700 |
| more than $217,400 | $7,999.84 + 4.797% of excess over $217,400 |
For taxable years beginning in 2018:
| Ohio Taxable Income | Tax Calculation |
|---|---|
| $0 – $10,850 | 0.000% |
| $10,851 – $16,300 | $80.56 +1.980% of excess over $10,851 |
| $16,300 – $21,750 | $188.47 + 2.476% of excess over $16,300 |
| $21,750 – $43,450 | $323.41 + 2.969% of excess over $21,750 |
| $43,450 – $86,900 | $967.68 + 3.465% of excess over $43,450 |
| $86,900 – $108,700 | $2,473.22 + 3.960% of excess over $86,900 |
| $108,700 – $217,400 | $3,336.50 + 4.597% of excess over $108,700 |
| more than $217,400 | $8,333.44 + 4.997% of excess of $217,400 |
For taxable years beginning in 2017:
| Ohio Taxable Income | Tax Calculation |
|---|---|
| 0 – $10,650 | 0.000% |
| $10,651 – $16,000 | $79.08 + 1.980% of excess over $10,650 |
| $16,000 – $21,350 | $185.01 + 2.476% of excess over $16,000 |
| $21,350 – $42,650 | $317.48 + 2.969% of excess over $21,350 |
| $42,650 – $85,300 | $949.88 + 3.465% of excess over $42,650 |
| $85,300 – $106,650 | $2,427.70 + 3.960% of excess over $85,300 |
| $106,650 – $213,350 | $3,273.16 + 4.597% of excess over $106,650 |
| more than $213,350 | $8,178.16 + 4.997% of excess over $213,350 |
For taxable years beginning in 2016:
| Ohio Taxable Income | Tax Calculation |
|---|---|
| 0 – $5,250 | 0.495% |
| $5,250– $10,500 | $25.99+ .990% of excess over $5,250 |
| $10,500 – $15,800 | $77.97+ 1.980% of excess over $10,500 |
| $15,800 – $21,100 | $182.91 + 2.476% of excess over $15,800 |
| $21,100 – $42,100 | $314.14 + 2.969% of excess over $21,100 |
| $42,100 – $84,200 | $937.63 + 3.465% of excess over $42,100 |
| $84,200 – $105,300 | $2,396.40 + 3.960% of excess over $84,200 |
| $105,300 – $210,600 | $3,231.96 + 4.597% of excess over $105,300 |
| more than $210,600 | $8,072.60 + 4.997% of excess over $210,600 |
For taxable years beginning in 2015:
| Ohio Taxable Income | Tax Calculation |
|---|---|
| 0– $5,200 | 0.495% |
| $5,200– $10,400 | $25.74+ .990% of excess over $5,200 |
| $10,400 – $15,650 | $77.22+ 1.980% of excess over $10,400 |
| $15,650 – $20,900 | $181.17 + 2.476% of excess over $15,650 |
| $20,900 – $41,700 | $311.16 + 2.969% of excess over $20,900 |
| $41,700 – $83,350 | $928.71 + 3.465% of excess over $41,700 |
| $83,350 – $104,250 | $2,371.88 + 3.960% of excess over $83,350 |
| $104,250 – $208,500 | $3,199.52 + 4.597% of excess over $104,250 |
| more than $208,500 | $7,991.89 + 4.997% of excess over $208,500 |
For taxable years beginning in 2014:
| Ohio Taxable Income | Tax Calculation |
|---|---|
| 0 – $5,200 | 0.528% |
| $5,200– $10,400 | $27.46+ 1.057% of excess over $5,200 |
| $10,400 – $15,650 | $82.42+ 2.113% of excess over $10,400 |
| $15,650 – $20,900 | $193.35 + 2.642% of excess over $15,650 |
| $20,900 – $41,700 | $332.06 + 3.169% of excess over $20,900 |
| $41,700 – $83,350 | $991.21 + 3.698% of excess over $41,700 |
| $83,350 – $104,250 | $2,531.43 + 4.226% of excess over $83,350 |
| $104,250 – $208,500 | $3,414.66 + 4.906% of excess over $104,250 |
| more than $208,500 | $8,529.17 + 5.333% of excess over $208,500 |
For taxable years beginning in 2013:
| Ohio Taxable Income | Tax Calculation |
|---|---|
| 0 – $5,200 | 0.537% |
| $5,200– $10,400 | $27.92+ 1.074% of excess over $5,200 |
| $10,400 – $15,650 | $83.77+ 2.148% of excess over $10,400 |
| $15,650 – $20,900 | $196.54 + 2.686% of excess over $15,650 |
| $20,900 – $41,700 | $337.56 + 3.222% of excess over $20,900 |
| $41,700 – $83,350 | $1,007.74 + 3.760% of excess over $41,700 |
| $83,350 – $104,250 | $2,573.78 + 4.296% of excess over $83,350 |
| $104,250 – $208,500 | $3,471.64 + 4.988% of excess over $104,250 |
| more than $208,500 | $8,671.63 + 5.421% of excess over $208,500 |
For taxable years beginning in 2012:
| Ohio Taxable Income | Tax Calculation |
|---|---|
| 0 – $5,200 | 0.587% |
| $5,200– $10,400 | $30.52+ 1.174% of excess over $5,200 |
| $10,400 – $15,650 | $91.57+ 2.348% of excess over $10,400 |
| $15,650 – $20,900 | $214.84 + 2.935% of excess over $15,650 |
| $20,900 – $41,700 | $368.93 + 3.521% of excess over $20,900 |
| $41,700 – $83,350 | $1,101.30 + 4.109% of excess over $41,700 |
| $83,350 – $104,250 | $2,812.70 + 4.695% of excess over $83,350 |
| $104,250 – $208,500 | $3,793.96 + 5.451% of excess over $104,250 |
| more than $208,500 | $9,476.63 + 5.925% of excess over $208,500 |
For taxable years beginning in 2011:
| Ohio Taxable Income | Tax Calculation |
|---|---|
| 0 – $5,100 | 0.587% |
| $5,100 – $10,200 | $29.94 + 1.174% of excess over $5,100 |
| $10,200 – $15,350 | $89.81 + 2.348% of excess over $10,200 |
| $15,350 – $20,450 | $210.73 + 2.935% of excess over $15,350 |
| $20,450 – $40,850 | $360.42 + 3.521% of excess over $20,450 |
| $40,850 – $81,650 | $1,078.70 + 4.109% of excess over $40,850 |
| $81,650 – $102,100 | $2,755.17 + 4.695% of excess over $81,650 |
| $102,100 – $204,200 | $3,715.30 + 5.451% of excess over $102,100 |
| more than $204,200 | $9,280.77 + 5.925% of excess over $204,200 |
For taxable years beginning in 2010:
| Ohio Taxable Income | Tax Calculation |
|---|---|
| 0 – $5,050 | 0.618% of Ohio taxable income |
| $5,050 – $10,100 | $31.21 + 1.236% of excess of $5,050 |
| $10,100 – $15,150 | $93.63 + 2.473% of excess over $10,100 |
| $15,150 – $20,200 | $218.52 + 3.091% of excess over $15,150 |
| $20,200 – $40,350 | $374.62 + 3.708% of excess over $20,200 |
| $40,350 – $80,700 | $1,121.78 + 4.327% of excess over $40,350 |
| $80,700 – $100,900 | $2,867.72 + 4.945% of excess over $80,700 |
| $100,900 – $201,800 | $3,866.61 + 5.741% of excess over $100,900 |
| more than $201,800 | $9,659.28 + 6.24% of excess over $201,800 |
For taxable years beginning in 2008 and 2009:
| Ohio Taxable Income | Tax Calculation |
|---|---|
| 0 – $5,000 | 0.618% of Ohio taxable income |
| $5,000 – $10,000 | $30.90 + 1.236% of excess of $5,000 |
| $10,000 – $15,000 | $92.70 + 2.473% of excess over $10,000 |
| $15,000 – $20,000 | $216.35 + 3.091% of excess over $15,000 |
| $20,000 – $40,000 | $370.90 + 3.708% of excess over $20,000 |
| $40,000 – $80,000 | $1,112.50 + 4.327% of excess over $40,000 |
| $80,000 – $100,000 | $2,843.30 + 4.945% of excess over $80,000 |
| $100,000 – $200,000 | $3,832.30 + 5.741% of excess over $100,000 |
| more than $200,000 | $9,573.30 + 6.24% of excess over $200,000 |
For taxable years beginning in 2007:
| Ohio Taxable Income | Tax Calculation |
|---|---|
| 0 – $5,000 | 0.649% of Ohio taxable income |
| $5,000 – $10,000 | $32.45 + 1.299% of excess of $5,000 |
| $10,000 – $15,000 | $97.40 + 2.598% of excess over $10,000 |
| $15,000 – $20,000 | $227.30 + 3.247% of excess over $15,000 |
| $20,000 – $40,000 | $389.65 + 3.895% of excess over $20,000 |
| $40,000 – $80,000 | $1,168.65 + 4.546% of excess over $40,000 |
| $80,000 – $100,000 | $2,987.05 + 5.194% of excess over $80,000 |
| $100,000 – $200,000 | $4,025.85 + 6.031% of excess over $100,000 |
| more than $200,000 | $10,056.85 + 6.100%% of excess over $200,000 |
For taxable years beginning in 2006:
| Ohio Taxable Income | Tax Calculation |
|---|---|
| 0 – $5,000 | 0.681% of Ohio taxable income |
| $5,000 – $10,000 | $34.05 + 1.361% of excess of $5,000 |
| $10,000 – $15,000 | $102.10 + 2.722% of excess over $10,000 |
| $15,000 – $20,000 | $238.20 + 3.403% of excess over $15,000 |
| $20,000 – $40,000 | $408.35 + 4.083% of excess over $20,000 |
| $40,000 – $80,000 | $1,224.95 + 4.764% of excess over $40,000 |
| $80,000 – $100,000 | $3,130.55 + 5.444% of excess over $80,000 |
| $100,000 – $200,000 | $4,219.35 + 6.32% of excess over $100,000 |
| more than $200,000 | $10,539.35 + 6.87% of excess over $200,000 |
For taxable years beginning in 2005:
| Ohio Taxable Income | Tax Calculation |
|---|---|
| 0 – $5,000 | 0.712% of Ohio taxable income |
| $5,000 – $10,000 | $35.60 + 1.424% of excess of $5,000 |
| $10,000 – $15,000 | $106.80 + 2.847% of excess over $10,000 |
| $15,000 – $20,000 | $249.15 + 3.559% of excess over $15,000 |
| $20,000 – $40,000 | $427.10 + 4.27% of excess over $20,000 |
| $40,000 – $80,000 | $1,281.10 + 4.983% of excess over $40,000 |
| $80,000 – $100,000 | $3,274.30 + 5.693% of excess over $80,000 |
| $100,000 – $200,000 | $4,412.90 + 6.61% of excess over $100,000 |
| more than $200,000 | $11,022.90 + 7.185% of excess over $200,000 |
2.2. Trends and Changes in Ohio’s Income Tax
Over the past two decades, Ohio has seen several changes in its income tax rates. Key trends include:
- Rate Reductions: Ohio has gradually reduced income tax rates over the years to stimulate economic growth and provide tax relief to residents.
- Bracket Adjustments: The income thresholds for tax brackets have been adjusted to account for inflation and changes in the cost of living.
- Business Income Tax: A flat rate of 3% was introduced for taxable business income starting in 2016, simplifying tax calculations for business owners.
These changes reflect Ohio’s efforts to balance revenue needs with the goal of fostering a business-friendly environment.
2.3. Impact of Economic Conditions on Tax Rates
Economic conditions play a significant role in shaping Ohio’s income tax policies. During periods of economic growth, the state may reduce tax rates due to increased revenue. Conversely, during economic downturns, tax rates may be adjusted to ensure the state can meet its financial obligations. Understanding what is Ohio’s income tax rate history helps in forecasting future tax policies based on economic indicators.
3. Calculating Your Ohio Income Tax
Understanding what is Ohio’s income tax rate is one thing, but knowing how to calculate your tax liability is crucial for effective financial planning.
3.1. Steps to Calculate Your Ohio Income Tax
Here’s a step-by-step guide to calculating your Ohio income tax:
- Determine Your Gross Income: This includes all income you received during the year, such as wages, salaries, tips, and investment income.
- Calculate Your Adjusted Gross Income (AGI): Subtract certain
