Ohio Capital Gains Tax (2026)
Ohio capital gains tax rate: Taxed as ordinary income at up to 3.99%
Ohio taxes capital gains as ordinary income at state rates. Municipal income taxes also apply to capital gains in most Ohio municipalities. Combined state + city rates can approach 6%–7% for capital gains in major cities.
Federal Capital Gains Rates Still Apply to Ohio Residents
All Ohio residents also owe federal capital gains tax. Federal long-term capital gains rates are 0% (income up to ~$47,025 single), 15% (income up to ~$518,900 single), or 20% (above). High earners may also owe the 3.8% Net Investment Income Tax (NIIT).
Short-Term vs. Long-Term Capital Gains in Ohio
Assets held less than one year are taxed as ordinary income at federal rates (10%–37%). Assets held over one year qualify for the preferential 0%/15%/20% federal rates. Ohio taxes capital gains as ordinary income at state rates. Municipal income taxes also apply to capital gains in most Ohio municipalities. Combined state + city rates can approach 6%–7% for capital gains in major cities.
Planning Considerations for Ohio Investors
- Tax-loss harvesting can offset gains at both state and federal levels
- Timing asset sales to control income year and bracket placement
- Ohio taxes capital gains at Taxed as ordinary income at up to 3.99% — factor this into net-of-tax return calculations
- Qualified Opportunity Zone investments can defer federal and potentially state gains
Frequently Asked Questions
What is the capital gains tax rate in Ohio?
Ohio taxes capital gains as ordinary income at state rates. Municipal income taxes also apply to capital gains in most Ohio municipalities. Combined state + city rates can approach 6%–7% for capital gains in major cities. Federal rates (0%, 15%, 20% for long-term gains) also apply regardless of state.
Does Ohio have a different rate for long-term vs. short-term capital gains?
Ohio does not distinguish between short- and long-term capital gains — both are taxed as ordinary income at up to 3.99%. Only federal law provides preferential long-term capital gains rates.
How do I reduce capital gains tax in Ohio?
Strategies include: holding assets over one year for federal long-term rates, tax-loss harvesting to offset gains, contributing to retirement accounts (401k, IRA), investing in Qualified Opportunity Zones, and timing sales across tax years. In Ohio, capital gains are taxed at up to Taxed as ordinary income at up to 3.99%, so these strategies reduce both federal and state tax.
Is this capital gains tax calculator free for Ohio?
Yes. Enter your gain amount, holding period, and annual income. The calculator applies both federal rates (0%/15%/20% long-term) and Ohio's Taxed as ordinary income at up to 3.99% state rate to estimate your total tax owed.