Tax season comes around every year, and almost worse than having to pay your taxes is the process of filing them. It doesn’t have to be that way, though — you can use our state tax calculator to make your life a whole lot easier. Ohio has an old and complicated tax code with many different tax laws you may be subject to or even benefit from.
You want to be sure that you fulfill all of your tax obligations, as failing to do so can be a major headache. The last thing you want to do during your summer is to deal with an audit. Make sure you’re informed as you head into tax season by reading through our guide to Ohio’s state taxes.
Overview of Ohio State Taxes
The US Federal Government has the right to tax its citizens; most of the income taxes you’ll pay in a given year are federal taxes. In addition to this, the federal government also grants individual states the right to levy taxes on their citizens. That means that when you file your taxes, you’ll have to do so both for your federal taxes and your state’s taxes.
State taxes are put toward useful, necessary things like schools, roads, and emergency services; so it’s not a bad thing that you’re paying them. That said, you want to do them correctly to make sure you’re not overpaying and losing some of your hard-earned income, or underpaying, and incurring a possible audit.
Ohio State Taxes: Quick Facts
Income tax: 2% - 5%
Sales tax: 5.75%
Property tax: 1.36%
Income taxes in Ohio are progressive, meaning they increase commensurate with income. However, your tax burden in the Buckeye State isn’t limited to your income. There are, as with many other states, taxes imposed on property ownership, capital gains, a sales tax, and excise or “sin” taxes.
As you will see in more detail in each section, Ohio is right in the middle of the spectrum on most taxes. It’s not as progressive and comprehensive as California or New York’s tax structure, but also isn’t as burden-free as a state like Texas, which has no income tax, or Oregon, which has no sales tax. Ohioans enjoy a completely middle-of-the-road rate of taxation.
Read through our guide to Ohio state taxes to be sure you’re aware of all the taxes you are subject to as an Ohioan, as well as where you might be able to claim some extra cash back. From federal to state taxes, Community Tax is here to help.
Ohio State Tax Brackets
Ohio’s taxes are progressive; that means that as you earn more money, more of that money is taxed. So, be aware that as you earn more money, you’ll be responsible for a larger sum of taxes taken out of your paycheck. The State of Ohio has eight tax brackets, ranging from folks who pay 0% in state taxes to those who pay a total of $8,333 plus 4.997% of anything made over $217,400. It’s not a very punishing tax, but it’s something you’ll want to be aware of.
Ohio’s tax brackets change every year to match inflation and the growth of the state’s economy. The most current year for which information is available is 2018. The brackets and the amount at which an income within each bracket is taxed are here:
Ohio Taxable Income
$0 - $10,850
$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
Ohio Department of Taxation, 2019
Ohio Personal Income Tax
Ohio personal income taxes are a separate tax from federal personal income taxes. These are paid directly to the state.
Because of the progressive structure of this tax code, you’re only paying the sum and percentage above income at that level, not on your entire income. This is particularly helpful for families near thresholds who might worry about having their necessary income taxed.
Here are some quick Ohio personal income tax facts to consider:
The median family income in Ohio is $54,000.
That is solidly in the bracket for earners above $43,450 and under $86,900.
This means the median income Ohioan pays a maximum rate of $967.68 + 3.465% on their income.
The State of Ohio brought in over $8 billion through income taxes in 2018.
Our pros make filing income tax a breeze, Give us a call!
Capital gains are money made through investing. The federal government taxes capital gains at different levels depending on the amount of money gained.
The minimum rate for the federal government is 0% tax under about $40,000, and the maximum rate is 23% for amounts above around $440,000. (These are approximations, as rates change depending on the years.)
Ohio levies an additional capital gains tax at a maximum rate of 5.4%, for a combined total of 28.9%.
Most people, however, will not end up paying anywhere near this amount, as it is only the top investment earners who will approach the maximum.
The exact rate at which you are taxed and the assets you hold that might be taxable will vary based on your own portfolio. Plus, some assets that might be considered investments, like property, also have deductions associated with them (more information on that further down).
Be sure that if you are bringing in a significant amount of money through investments, and you’re worried about how much you’ll be taxed, you speak with a professional tax preparer. Failing to properly account for your capital gains is an easy way to get yourself audited, so you probably don’t want to take any unnecessary risks in that area.
Ohio State Sales Tax
Like most states, Ohio levies a sales and use tax on most of the goods and services purchased within the state. You might be familiar with the basic concept of a sales tax, but what is the difference between a simple sales tax and a sales and use tax?
According to the Ohio Department of Taxation, a use tax is levied on the customer directly when a sales tax is not collected by the vendor. This might occur when someone within the state of Ohio is purchasing items from outside the state. So, before you get excited and start ordering tons of things online from vendors in Delaware (they have 0% sales tax!), you should know that the state of Ohio will still assess a use tax.
The Ohio state sales tax rate is 5.75% + local municipal rates. The state allows counties, cities, and other taxing jurisdictions to apply their own tax rates in addition to the state minimum. Depending on where you are in the state, rates can be as low as 6.5% in Stark county, and as high as 7.25% in many other counties. While these rates aren’t as low as Delaware or Oregon who don’t impose a sales tax at all, they are nowhere near some of the eye-popping sales tax rates in California, where in some parts of LA sales tax can exceed 10%!
Ohio Excise Taxes
Most if not all states levy some form of excise tax. Certain excise taxes are also popularly known as “sin taxes” because they are applied to goods or services that are considered harmful if used excessively. Commonly taxed “sins” include alcohol, tobacco, gasoline, sex work, and marijuana in states where it’s legal.
In the state of Ohio, alcohol is taxed based on the kind of alcohol in question as well as the ABV (alcohol by volume) in that beverage. The Ohio Department of Taxation provides this chart describing the amount of tax levied on every type of alcohol.
Type of Product
Beer in bottles or cans (12 ounces or less)
Beer in bottles or cans (more than 12 ounces)
6 oz. or fraction thereof.
Wine (containing 4-14% ABV)
Wine (containing 14-21% ABV)
Beer in barrels
Ohio’s tobacco sin tax is divided into a few different categories based on the kind of tobacco product in question. According to the Ohio Department of Taxation:
Cigarettes are taxed at $1.60 per pack.
Other tobacco products in general are taxed at 17%.
Small cigars are taxed at 37%.
Premium cigars are capped at a $0.50 tax per cigar.
Presently, marijuana is illegal in Ohio, except for some cases of medical use.
Gas taxes are put in place by states seeking to reduce their carbon footprint, promote the use of public transit, or simply gain an extra source of revenue, often for infrastructure improvement projects.
Ohio charges a $0.28 per gallon tax on all fuel sales.
If you drive diesel, that jumps to $0.37 a gallon.
Still, Ohio’s gas prices tend to be pretty cheap at around $2.56 per gallon. So, you likely won’t feel the effects of the gas tax too much — compare these prices, for example, to someone from California, who experiences some of the highest gas prices in the nation at around $3.60 a gallon.
Ohio Insurance Tax
Ohioans must also pay a small tax on their insurance premiums.
This tax is 1.4% of gross premiums with a maximum tax of $250.
Ohio State Property Tax
Property taxes are paid as a percentage of the assessed value of your property. Ohio’s rate of property taxation is variable by county, so there is no uniform rate of taxation in the state. Here are a few quick facts to note about Ohio’s property tax rates and how they relate to income.
The median amount paid in property taxes was around $1,800.
That amounts to about 3.16% of the median income of $54,000.
This is around 1.36% of the median property value in the state.
Ohio ranks 11th in the US in percent of property value that is taxed, but 22nd in terms of the outright amount paid in property tax, and 20th in terms of percent of income spent on property taxes.
How are property values assessed?
In the US generally, every one to five years, a government official value assessor will come through your city and value the properties. As property values around town are likely to change with fluctuations in the market, it’s probable that your rate of property tax will change depending on the year.
Be aware of this as you head into tax season, as your property’s value may have increased or decreased — and so might your property taxes— since the last time you filed.
An estate tax is a tax that is paid on assets left to those who survive someone who has died. In Ohio, estates are not taxed as of January 1, 2013. If you or a loved one pass away and leave your Ohio-based assets to your next of kin, rest assured that the state will not claim any portion of that estate.
You should note, however, that above certain amounts (as of 2019, $11.4 million) the federal government can exact an estate tax, so the associated forms will need to be filled out. Be sure to speak with a tax expert when planning your estate to be sure that you are able to pass on as much as you can to your loved ones.
Ohio State Tax Credits
States offer a few different relief structures for taxpayers. Deductions reduce the amount of your income that’s taxable, exemptions relieve people from certain taxes, and tax credits simply outright reduce the amount of money that you owe on your taxes. In Ohio, a few tax credits are available.
Ohio Historic Preservation Tax Credit Program
Owners of buildings with historical significance can apply for a program that provides them with a tax credit in exchange for redeveloping historical buildings.
Earned Income Tax Credit (EITC)
Families with lower incomes can file for tax credits commensurate with the number of children they have in order to receive some relief from tax burdens. Policy Matters Ohio reports that families making under $20,000 a year (nearly a fifth of Ohioans) qualify for a $52 credit if they have no children, $346 for one child, $572 for two children, and $643 for three or more children.
Child and Dependent Care Tax Credit (CDCTC)
Families making below certain thresholds have even more opportunity to save on their tax returns through this tax credit. According to Tax Credits for Workers and their Families, taxpayers who qualify for the equivalent federal program automatically qualify for Ohio’s. For workers making less than $20,000 a year, this credit 100% matches its federal counterpart. For workers between 20 and 40 thousand, it matches 25% of the federal amount.
Ohio State Tax Exemptions and Deductions
In addition to the federal government’s standard deduction scheme, many states offer deductions to taxpayers to help ease the burden of taxation, especially for those who are a little light on cash.
Personal and dependent exemptions are commensurate with income. The brackets are:
The State of Ohio offers a number of deductions and income adjustments based on your line of work or life circumstances. When filing, taxpayers fill out a Schedule A form with itemized deductions. The categories on that form include:
Business-based and employee deductions: this includes Ohio-earned income by residents of other states, social security income, and work done in response to a natural disaster.
Federal income: the State of Ohio will give you a deduction based on the amount the federal government paid you in tax refunds the previous year, as well as certain kinds of federal interest payments and dividends that are exempt from state taxation.
Uniformed service: income including injury relief, military retirement, and income earned by Ohioans stationed outside of Ohio is subject to a tax deduction.
Education: contributions to Ohio 529 savings plans and tuition credit purchases can count as deductions, as can Pell grants used to pay for room and board.
Medical: disability benefits, certain kinds of healthcare premium expenses, funds deposited into certain kinds of healthcare savings accounts, and organ donor expenses.
In addition to the standard deductions and aforementioned credits, Ohio offers exemptions on sales tax on a large number of items. Some of these items that are most commonly purchased include:
Food purchased and eaten off the premises of the place where it’s sold.
Food for students in university cafeterias.
Items purchased using food stamps.
Sales by churches, charitable organizations, and nonprofits.
Sales of computers and related and equipment to school teachers for the purpose of teaching.
Gasoline (the gas tax is applied, but an additional sales tax is not).
Emergency and fire fighting vehicles.
Direct use exemptions: materials used for manufacturing, farming equipment, materials used for mining crude oil, and a number of other industrial materials are exempt from sales tax
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Filing your Ohio tax return in addition to your federal tax return can be tricky. With many possible taxable sources of income, including property, your paycheck, and capital gains, it can be hard to keep everything straight. Plus, if you’re hoping to maximize the amount you benefit from deductions, tax credits, and exemptions, you’ve got a lot on your plate.
Hopefully, this guide has helped you figure out what you need to keep track of as you get ready to file. For more help on your state and federal tax returns, consider consulting with a tax expert. Community Tax’s team of expert tax preparers will be sure to get can help you get the refund you deserve — and keep you out of troublesome audits!
As you prepare your taxes, remember to have these items on file.
Your previous year’s tax returns.
Any w-2’s from your employers.
Statements of earnings from any investments you’ve made.
Your social security number.
Proof needed for any exemptions you’re applying for.
How to Pay Ohio Taxes
When it comes time to pay the State of Ohio its due, you have a few options.
You can pay online using a bank account
Pay with a credit card for a 2.5% service fee
Send in a check, money order, or cashier’s check.
You should keep in mind that the Ohio Department of Taxation does not offer payment plans. That means that you’ve got to get whatever you might owe in on time to avoid fees.
Fallen behind on state taxes? Get help with tax resolution today!
Now that you’ve learned about all the nitty-gritty details of doing your taxes in the Buckeye state, it’s time to check out some interesting fun facts about taxes in Ohio!
Ohio has taxed property since 1825 — the state was admitted to the Union in 1803, so for 22 glorious years, Buckeyes enjoyed a property-tax free state.
Ohio taxes vermouth differently from wine, at $1.10 per gallon.
Ohio does not tax human organ donation, but does tax hair donation, as they fall into different categories.
Summary of Federal Taxes
Of course, state taxes are not the end of the story; you’re also responsible for your federal taxes every year. Tax brackets and rules are different at the federal level than at the state level, so if you’re having any trouble navigating the complicated waters of taxation, reach out to a Community Tax representative!
Call us to strees less and save more on your federal tax refund.
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