State guide · Ohio · 2026 rules
S corporation in Ohio: what the election changes
Ohio has no state tax on an S corporation. The changes are local: who pays the city income tax, and what a school district taxes.
Choose a state and enter your profit and salary to see the comparison.
The state
Ohio puts no income or franchise tax on an S corporation. The commercial activity tax starts only above $6 million of Ohio receipts, for every kind of entity, and Ohio charges no annual report fee.
Unemployment insurance: 2.7% for a new employer, 2.85% with the technology fee, on the first $9,000 of wages in 2026. Ohio covers corporate officers whether or not they own stock.
City income tax
Today your net profit is taxed on your own city return. After the election the S corporation is the taxpayer on its net profit after your salary (Columbus: Form BR-25 at 2.5%), and your salary is taxed through withholding. The total changes little, except in the few cities that kept taxing S-corporation income to the owner by a 2003 vote.
School district income tax
In a school district that taxes earned income, a sole proprietor’s net self-employment earnings are taxed today. After the election only your salary is in the base: S-corporation income is neither wages nor self-employment earnings. Districts that tax modified adjusted gross income see no change.
The optional pass-through entity tax
Ohio’s 3% electing pass-through entity tax is filed on Form IT 4738 by April 15, with a refundable credit for the owner. The calculator leaves it out.
Worked examples
A single-member LLC owner, single filer, 22% federal bracket, default payroll and return costs. The figure is total tax and added costs as an S corporation compared with staying as you are.
| Profit / salary | No local tax | Columbus (2.5%) | 1% earned-income school district |
|---|---|---|---|
| $80,000 / $45,000 | $724 lower | $982 lower | $1,012 lower |
| $120,000 / $60,000 | $3,125 lower | $3,517 lower | $3,633 lower |
| $200,000 / $90,000 | $7,905 lower | $8,564 lower | $8,852 lower |
Starting payroll in Ohio
Register for state and school district withholding with the Ohio Department of Taxation within 15 days of becoming liable, and for unemployment insurance with the Ohio Department of Job and Family Services.
Other states
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- Washington, DC
- West Virginia
- Wisconsin
- Wyoming
Sources
- Ohio Department of Taxation, Commercial Activity Tax page (ORC 5751)
- ORC 111.16(F) (eff. 2025-04-03)
- ORC 5747.38; Ohio Department of Taxation EPTE FAQ
- ORC 5747.39 (eff. 2025-09-30)
- ORC 5747.38(C)
- ODJFS 2026 Rate Details (ORC 4141.25)
- ORC 4141.01(B)(1) and (G)(1) (eff. 2025-09-30, latest legislation H.B. 96)
- ORC 718.01(C)(14)(a) (eff. 2025-09-30)
- City of Columbus, Instructions for Form BR-25 (tax year 2025)
- ORC 5748.01(E)(2) (eff. 2026-01-01)
Federal figures: IRS Publication 15 (2026), Schedule SE and Form 2553 instructions. Every figure was read on an official page and checked a second time. Checked October 24, 2026. How we check facts.