Updated October 16, 2026. Quick answer: Yes. Ohio taxes interest and dividends as nonbusiness income on a graduated schedule: “0.000% of Ohio taxable nonbusiness income” up to $26,050, then 2.75% to $100,000, then 3.125% for 2025. The Revised Code prints no 3.125% step from 2026. Interest from Ohio public obligations is deducted and other states’ is added.
How Ohio treats dividends and interest
| Item | What the documents say |
|---|---|
| Treatment | Taxed as nonbusiness income on the graduated schedule |
| 2025 rates | 0% up to $26,050, 2.75% of the excess to $100,000, and “$2,394.32 plus 3.125% of the amount in excess of $100,000” |
| Other states’ bonds | Add interest and dividends “paid on obligations or securities from a non-Ohio state, city, county” |
| Ohio bonds | Deduct “Interest income earned from Ohio public obligations” |
| U.S. obligations | Interest and dividends from U.S. government obligations exempt by federal law are deducted on Line 26 |
A $20,000 example
If your Ohio nonbusiness income is already above $26,050 and below $100,000, an extra $20,000 of dividends and interest is taxed at the 2.75% rate, computed as $20,000 x 2.75% = $550.
What changes in 2026
The Revised Code prints, for taxable years beginning in 2026 and after, “$332.00 plus 2.75% of the amount in excess of $26,050”, so the Code prints no 3.125% step for those years.
Federal rules
The state’s treatment sits on top of the federal one. Qualified dividends and ordinary dividends are sorted out on the Form 1099-DIV, as the site explains in Box 1a and 1b: ordinary versus qualified dividends, and interest is reported as covered in 1099-INT Box 1. The IRS explains the federal side in Topic no. 403, Interest Received and Topic no. 404, Dividends.
Related: whether Ohio taxes capital gains, whether Ohio taxes pensions, how Ohio taxes retirement income, dividends and interest tax by state, and how tax-exempt interest is reported.
Find the right next step for your situation
About how much do you have invested? Pick the range that fits; your next step appears immediately below.
Compare vetted advisors for your investments
If your portfolio is $250,000 or more, this connects you (free, with no obligation to hire anyone) with 2 to 3 vetted advisors.
Before you start, what actually happens. The matching service is run by WiserAdvisor, an independent advisor-matching company. It opens on their site, asks for your ZIP code and a few questions, and matches you with 2 to 3 vetted advisors. It is free to you.
WiserAdvisor states the service is built for portfolios of $250,000 and above. By submitting, you consent to emails, phone calls and text messages from WiserAdvisor and up to three advisors, so expect to be contacted. Clear Money Guide may earn a referral payment for a qualifying completed form, whether or not you ever hire anyone.
Opens on WiserAdvisor’s site in a new tab.
See how an advisor weighs your portfolio
Price the destination before you decide. The matching service below introduces you to advisers who pay to meet you.
Before you start, what actually happens. The form is run by Kapitalwise, our advisor-matching partner. Kapitalwise sends your details to advisers who pay for the introduction, so expect calls and texts. Clear Money Guide may earn a referral payment through this service, whether or not you ever hire anyone. This is free to you and there is no obligation to hire anyone.
The Kapitalwise form opens here; you stay on this page.
What happens when you press the button
It asks about nine questions: age, investable assets, location; then your name, email and phone number, and verifies the phone by text. Nothing loads and nothing reaches Kapitalwise until you press the button.
Prefer flat-fee or hourly pricing instead? Compare ranges here.
Answer againSources
- 2025 Ohio IT 1040 Individual Income Tax Return Instructions (Ohio Department of Taxation): https://tax.ohio.gov/static/forms/ohio_individual/individual/2025/it1040-booklet.pdf
- Ohio Revised Code Section 5747.02 (Ohio Legislative Service Commission): https://codes.ohio.gov/ohio-revised-code/section-5747.02
- Ohio Individual Income Tax Rates (Ohio Department of Taxation): https://tax.ohio.gov/individual/resources/annual-tax-rates
Sources: the primary documents linked above, read on October 5, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.