Ohio’s individual income-tax rate is already scheduled to reach an effective 2.75% on taxable income above $26,050 in tax year 2026 under enacted law. Further reductions are possible, but proposals to phase the tax down to that rate are not enacted in the bill statuses reviewed as of October 11, 2026. There is no enacted long-term schedule establishing that Ohio’s income tax will disappear.
What Ohio law currently provides
House Bill 96, Ohio’s 2025 budget law, is the enacted baseline for the current outlook. The Ohio Department of Taxation’s 2025 Greenbook describes the 2026 structure as one effective 2.75% rate on income above $26,050. That threshold matters: 2.75% is not a tax on every dollar of gross income. The tax calculation also depends on taxable income and applicable provisions. Ohio Department of Taxation, 2025 Greenbook; Ohio Revised Code § 5747.02.
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H.B. 96 also affects more than the headline rate. For taxable years 2025 and 2026, it suspended inflation indexing for specified brackets and personal exemptions, limited eligibility for certain credits and exemptions based on modified adjusted gross income, and directed withholding-table changes subject to revenue limits. The details vary by provision and taxpayer circumstances; the Greenbook describes the statutory limits on foregone General Revenue Fund receipts from withholding-table adjustments as up to $100 million in FY 2026 and $215 million in FY 2027. Those are limits for the withholding adjustments, not estimates of total tax cuts or individual savings. Ohio Department of Taxation, 2025 Greenbook.
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What could change next
H.B. 30 and S.B. 3: proposed further phase-down
In the 136th General Assembly, H.B. 30 and S.B. 3 propose phasing Ohio’s income tax down over two years to a flat 2.75% rate. The official bill pages reviewed show introduction and committee activity, not final passage or presentation to the governor. They therefore describe possible future policy, not a change taxpayers can treat as law. Any eventual effect would depend on the bills’ subsequent action and final enacted language. Ohio H.B. 30; Ohio S.B. 3.
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The proposed 2030 phase-out is not current law
Some coverage may refer to a plan to eliminate the nonbusiness income tax by 2030. That schedule came from H.B. 386 and S.B. 216, introduced in the 135th General Assembly in 2024. Legislative Service Commission analyses describe six-year phase-out proposals; they do not establish an enacted repeal schedule. LSC analysis of H.B. 386; LSC analysis of S.B. 216.
How to read the outlook
- Enacted baseline: H.B. 96 sets the operative changes reflected in the 2026 structure.
- Possible next step: H.B. 30 and S.B. 3 would make additional changes if passed and enacted.
- Not a current schedule: The older 2030 phase-out proposals do not show that the tax will reach zero.
These distinctions matter because a bill’s introduction does not guarantee passage, and a proposal can change during the legislative process. The rate, the income threshold, which income categories and taxpayers are covered, and the start date all depend on enacted statutory language.
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Tax-year changes are not the same as paycheck changes
Ohio’s Office of Budget and Management reported in March 2026 that the rate reduction began in taxable year 2025 and was fully implemented for taxable year 2026. Revised withholding tables took effect in October 2025. Withholding is tax collected from pay during the year; it is not itself the final annual tax calculation. A change in take-home pay therefore does not, by itself, establish a taxpayer’s total liability or savings. The same report estimated a 1.8% year-over-year reduction in FY 2026 revenue attributable to revised withholding rates—an observation about state revenue, not a personal savings estimate. Ohio Office of Budget and Management, March 2026 report.
What the revenue estimates do—and don’t—say
An Ohio Legislative Service Commission document estimates that personal income tax would raise $10.70 billion in FY 2028 if prior trends hold and no further changes occur. This is a conditional scenario, not a guaranteed forecast. Actual revenue and the budget effects of any rate reduction depend on collections, economic conditions, credits, and the terms of future legislation. Ohio Legislative Service Commission fiscal analysis.
For taxpayers, the practical question is whether a specific change becomes law and how its provisions apply to their situation—not whether a proposed headline rate appears in a bill. For Ohio’s budget, additional cuts would need to be considered alongside their revenue effects and the services funded by state receipts; the available estimate does not quantify the effect of a particular future bill.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What to watch for
- Whether H.B. 30 or S.B. 3 advances beyond committee and is enacted.
- The bill’s final effective tax year, rate schedule, and income threshold, if enacted.
- Whether the change covers the same income and taxpayer categories as existing law.
- Any later changes to credits, exemptions, inflation indexing, or withholding rules.
Bill status can change after the dates reflected in official pages, so check the current legislature pages before relying on a proposal as an imminent change.
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