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27 July 2026

Ohio releases modified 2026 income tax withholding formulas and tables reflecting scheduled tax cut

The Ohio Department of Revenue (Department) has updated its income tax withholding tables and formulas reflecting a scheduled decrease in the tax rates under H.B. 96 enacted in 2025. The modified withholding formulas/tables apply to wages paid on and after August 1, 2026.

Background

In 2025, Ohio Governor Mike DeWine signed into law H.B. 96 implementing a two-year phased transition to a flat personal income tax rate. Specifically, retroactive to January 1, 2025, the top personal income tax rate was reduced from 3.5% to 3.125%. Effective January 1, 2026, a flat personal income tax rate of 2.75% applies to income over $26,050. (See Tax Alert 2025-1744.)

Supplemental wage withholding

The Department states that the set optional flat rate for bonuses and irregular wage payments is 2.75% for 2026.

Ernst & Young LLP insights

Ohio is one of several states that sets the withholding tax rates higher than the personal tax rate under the state tax code. For instance, effective August 1, 2026, Ohio's highest withholding tax rate is 3.4% while the flat tax rate is 2.75%. (Ohio Tax Withholding Tables — Percentage Method.)

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Contact Information

For additional information concerning this Alert, please contact:

Workforce Tax Services - Employment Tax Advisory Services

Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor

Document ID: 2026-1619

 

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