Capital Gains Tax in Ohio (2026)
Ohio has no special capital gains rate — the state taxes your gain as ordinary income at graduated rates (about 2.75% to 3.5%, est.), stacked on top of the federal 0/15/20% tax and the 3.8% NIIT. Run the combined number below.
Reviewed & updated · 2026 tax-year figures · Federal + Ohio state
Ohio does not have a preferential long-term capital gains rate. Under Ohio Rev. Code §5747.02, both short- and long-term gains are taxed as ordinary income at Ohio's graduated rates — 0% on the lowest band, then roughly 2.75%, topping out near 3.5% (est.) for 2026 — with Ohio phasing toward a flat ~2.75%. That state tax is added on top of the federal capital gains tax (0/15/20% long-term under IRC §1(h)) and the 3.8% NIIT (§1411). Even a top-bracket Ohioan pays only about 20% + 3.8% + 3.5% ≈ 27.3% combined on a long-term gain.
Net proceeds $179,600$20,400
Show our work federal + OH, step by step
Estimates only, for the 2026 tax year. Not tax advice. Ohio bracket thresholds and rates are set by the state budget and adjusted over time as the state phases toward a flat rate; the figures used here are marked est. as projected 2026 amounts, owner-verifiable against the Ohio Department of Taxation's annual rate tables.
How does Ohio tax capital gains?
Ohio gives capital gains no special break. Under Ohio Rev. Code §5747.02, a capital gain is simply part of your Ohio taxable income and is taxed at the same graduated rates as wages. There is no equivalent of the federal 0/15/20% long-term schedule and no distinction between short-term and long-term at the state level. Whether you held the asset a week or a decade, Ohio taxes the whole gain as ordinary income.
The good news for Ohio investors is that those rates are low and getting lower. Ohio has spent several budget cycles collapsing its brackets and cutting its top rate, and it is phasing toward a flat rate near 2.75%. For the 2026 tax year this page models a graduated two-bracket estimate that tops out at about 3.5% (est.), with income below roughly $26,050 taxed at 0%. Because Ohio's income tax begins from your federal adjusted gross income, everything you exclude or defer federally — including the §121 home-sale exclusion — flows straight through to the Ohio side.
How does Ohio stack on top of federal?
The two systems run in parallel and the amounts are added — Ohio does not replace or absorb the federal tax. For a long-term gain, you owe:
- Federal: 0%, 15%, or 20% depending on where the gain stacks on your taxable income, under IRC §1(h);
- Federal NIIT: an extra 3.8% on net investment income once MAGI passes $200,000 (single) / $250,000 (joint), under IRC §1411; and
- Ohio: your marginal state rate, up to about 3.5% (est.), on the full gain under O.R.C. §5747.02.
Add those together and even a top-bracket Ohioan with a long-term gain pays only roughly 20% + 3.8% + 3.5% ≈ 27.3% — far less than in high-tax states, where the state layer alone can exceed 10%. A short-term gain is worse, because the federal side jumps to ordinary rates (up to 37%) instead of 20%, but the Ohio layer stays the same. The calculator above computes each layer separately and shows you the exact bands.
What are the 2026 Ohio income-tax brackets? (est.)
These are the marginal brackets Ohio applies to your gain. Unlike the federal schedule, Ohio uses the same bracket thresholds for every filing status. All figures are projected 2026 amounts (est.), owner-verifiable against the Ohio Department of Taxation annual rate tables.
| Ohio taxable income (all filers, est.) | Marginal rate |
|---|---|
| $0 – $26,050 | 0% |
| $26,050 – $100,000 | 2.75% |
| $100,000+ | 3.5% (est.) |
| Phasing target (future flat rate) | ~2.75% · Ohio Dept. of Taxation |
How this calculator works & where the numbers come from
No black box. The federal side uses the same unit-tested engine as our main calculator: net gain = proceeds − basis; classify by holding period; for long-term gains, subtract the standard deduction and stack the gain across the 0/15/20% bands per IRC §1(h); add 3.8% NIIT where modified AGI crosses the §1411 threshold; short-term gains are computed as the true marginal difference in ordinary tax. The Ohio side takes the same taxable gain (after any §121 exclusion, since Ohio starts from federal AGI), subtracts an estimated Ohio personal exemption from your ordinary income, and stacks the gain across Ohio's graduated brackets under O.R.C. §5747.02 — 0% up to about $26,050, then 2.75%, then about 3.5% (est.) at the top. Ohio has no $1M surtax and no separate capital-gains schedule. The two results are summed.
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Primary sources (linked, not just named)
- Ohio Rev. Code §5747.02 — imposition & rates
- Ohio Dept. of Taxation — annual tax rates
- Ohio Department of Taxation — home
- 26 U.S.C. §1(h) — federal capital gains rates
- 26 U.S.C. §1411 — 3.8% NIIT
- 26 U.S.C. §121 — home-sale exclusion
- IRS Topic No. 409 — Capital Gains and Losses
- IRS Publication 550 — Investment Income
Ohio capital gains tax, answered
Does Ohio have a separate capital gains tax rate?
No. Ohio has no preferential capital gains rate. Under O.R.C. §5747.02, a capital gain — short-term or long-term — is taxed as ordinary income at the state's graduated rates, which for 2026 run from 0% on the lowest band to about 3.5% (est.) at the top. The federal short/long distinction does not exist at the Ohio level.
How much is capital gains tax in Ohio for 2026?
Your Ohio tax equals the gain taxed at your marginal state rate (up to about 3.5%, est.), added to the federal capital gains tax. Federally, a long-term gain is taxed at 0/15/20% (IRC §1(h)) plus 3.8% NIIT for high earners. A high-earning Ohioan might pay roughly 15%–20% federal + 3.8% NIIT + about 3.5% state — combined near 27% on a long-term gain. Use the calculator above for your exact figure.
How does Ohio capital gains tax stack on top of federal?
They are computed separately and summed. The federal side taxes long-term gains at 0/15/20% and adds 3.8% NIIT for high earners; short-term gains are ordinary income. Ohio ignores the holding period and taxes the entire gain as ordinary income at its graduated rates. Your total tax is federal + NIIT + Ohio.
Is Ohio moving to a flat income tax?
Yes — Ohio has been collapsing brackets and cutting its top rate, phasing toward a flat rate near 2.75%. For 2026 this calculator models a graduated two-bracket estimate topping out at about 3.5% (est.) because the exact 2026 rates are fixed by the state budget. The final figures are owner-verifiable against the Ohio Department of Taxation's annual rate tables, and the trend is downward.
Do Ohio cities tax capital gains?
Generally no. Most Ohio municipal income taxes apply only to earned income — wages and net business profits — and do not reach investment income such as capital gains, dividends, or interest for individual residents. So for a typical stock, crypto, or investment-property sale, only the state of Ohio and the federal government tax the gain. Always confirm your city's ordinance, since a handful of local rules differ.
Does Ohio conform to the $250k/$500k home-sale exclusion?
Yes. Ohio's income tax begins from federal AGI, so the IRC §121 exclusion carries through automatically. Up to $250,000 of gain ($500,000 married filing jointly) on a primary residence is excluded for both federal and Ohio purposes if you owned and used the home for two of the last five years. Only gain above the exclusion flows into Ohio taxable income, where it is taxed as ordinary income. See our home-sale hub for the mechanics.
Compare Ohio with other states
Ohio's combined burden lands near the low-middle of the pack: its top state rate (about 3.5%, est., and falling) is a fraction of what high-tax states charge, but unlike the no-income-tax states it does still tax the gain. Every state page combines the same unit-tested federal engine with that state's own rules, so you always see the full combined number, not just half of it:
- California — taxes gains as ordinary income up to 13.3%, the steepest state layer in the country.
- New York — graduated rates over 10% at the top, plus New York City's own tax.
- Texas — no state income tax, so the gain is federal-only.
- Florida — also no state income tax on capital gains.
- Main Capital Gains Tax Calculator — fold any state's top marginal rate into your federal receipt.