Ohio's new flat 2.75% income tax: what changed on your paycheck
Ohio replaced its brackets with a single 2.75% rate in 2026 and updated withholding tables in August.
Key numbers
- New flat rate: 2.75% above $26,050
- Top rate was 3.5% in 2024 and 3.125% in 2025
- New withholding tables from August 1, 2026
Ohio now taxes personal income at a single rate of 2.75% on income above $26,050. The change comes from the state budget, House Bill 96, which first lowered the top rate to 3.125% for 2025 and then moved to the flat rate on January 1, 2026.
Who benefits most
Workers who earn more than $100,000 see the biggest change, because their income used to be taxed at 3.5%. Income below $26,050 remains untaxed, so lower earners see little difference.
Withholding caught up in August
The Ohio Department of Taxation released revised withholding formulas for wages paid on or after August 1, 2026. If your Ohio withholding looked slightly smaller from August, this is why. Any over-withholding earlier in the year will be settled when you file your 2026 return.
City taxes are unchanged
The state cut does not affect municipal income taxes, which in most Ohio cities range from 1% to 2.5%. For many workers the city tax is now close to, or larger than, the state tax on their paycheck.
Try the Ohio Paycheck Calculator
Sources
- EY Tax News: Ohio releases modified 2026 withholding formulas and tables
- EY Tax News: Ohio legislation implements flat tax in 2026