Updated October 7, 2026. Quick answer: Generally no, if you qualify for the federal exclusion. Ohio’s statute says Ohio adjusted gross income “means federal adjusted gross income, as defined and used in” the Internal Revenue Code, so a gain excluded under section 121 is not in it. Gain above the exclusion is taxed at graduated rates that, for 2026 and after, start at 2.75% over $26,050.
Ohio tax on home sale profit at a glance
| Item | What the documents say |
|---|---|
| Profit on your main home | Ohio adjusted gross income means federal adjusted gross income; the documents read list no home-sale adjustment |
| Rate on gain above the exclusion | Graduated: 2.75% over $26,050 and 3.125% over $100,000 for 2025; $332.00 plus 2.75% over $26,050 for 2026 and after |
| Collected at the sale | No withholding shown; a county may levy a real property transfer tax on each deed of up to thirty cents per hundred dollars, and a county fee of ten cents per hundred dollars (at least $1) for receiving the statement of value |
| Source | Ohio Legislative Service Commission; Ohio Department of Taxation |
What the Ohio documents say
ORC 5747.01 says Ohio adjusted gross income “means federal adjusted gross income, as defined and used in” the Internal Revenue Code, and the 2025 IT 1040 begins with “Federal adjusted gross income (federal 1040 or 1040-SR, line 11a)”. Under the federal statute, “Gross income shall not include gain from the sale or exchange” of a principal residence that meets the ownership and use tests, so an excluded gain never enters federal adjusted gross income. That is reasoning from two documents. The documents read list no home-sale adjustment.
ORC 5747.02 sets the rates. For 2025 the top brackets are 2.75% over $26,050 and 3.125% over $100,000; for taxable years beginning in 2026 and after the statute prints “For taxable years beginning in 2026 and thereafter, $332.00 plus 2.75%” of the amount over $26,050.
What the federal exclusion requires
Most state answers start here. The statute says “Gross income shall not include gain from the sale or exchange” of property that, during the five years before the sale, you owned and used as your principal residence for periods adding up to two years or more. The limit is “shall not exceed $250,000”, or $500,000 for a husband and wife who make a joint return and meet the statute’s conditions. See CMG’s home sale taxes page and exclusion calculator.
A worked example at a $400,000 gain
An illustration, not a return: a married couple in Ohio sells their main home with a gain of $400,000 and meets the federal ownership and use tests. The gain is below the $500,000 joint exclusion, so it is not in federal adjusted gross income and, on the documents read, $0 is taxed by Ohio. As a second illustration, computed below, suppose the gain were $600,000. The amount above the exclusion would then be $100,000, which is taxed at the graduated rates; this page computes no tax because the bracket depends on the rest of the return.
What is collected at the sale
The documents read show no Ohio withholding on a home sale. ORC 322.02 lets a county levy a “real property transfer tax on each deed conveying real property” at up to thirty cents per hundred dollars. The statute text read shows no principal-residence exemption.
ORC 319.54(G)(3) also sets a county fee “For receiving statements of value and administering section 319.202 of the Revised Code, one dollar, or ten cents for each one hundred dollars or fraction of one hundred dollars, whichever is greater, of the value of the real property transferred”.
What changes in 2026
Ohio: for taxable years beginning in 2026 and after, ORC 5747.02 prints $332.00 plus 2.75% of the amount over $26,050, and the 3.125% bracket is no longer printed.
What the documents do not say
- The statutes and form read do not mention section 121, so conformity is reasoned from the federal starting point. Municipal and school district income taxes were not read. The form is for tax year 2025 and the statute is read as currently posted.
Common mistakes
- Using the 2025 brackets for a 2026 sale; the statute prints a different computation for taxable years beginning in 2026.
- Reading the county transfer tax as a tax on your profit; the statute sets it per hundred dollars of value.
- Assuming the answer for one state applies to another, or that the state answer changes the federal tax on the sale.
Related: home sale taxes, state tax on home sale profit, how Ohio taxes capital gains, Ohio retirement taxes, and home sale exclusion calculator.
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 home sale proceeds
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 plans your sale proceeds
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
- Ohio Revised Code Section 5747.01: https://codes.ohio.gov/ohio-revised-code/section-5747.01
- Ohio Revised Code Section 5747.02 Tax rates: https://codes.ohio.gov/ohio-revised-code/section-5747.02
- 2025 Ohio IT 1040 Individual Income Tax Return bundle: https://dam.assets.ohio.gov/image/upload/tax.ohio.gov/forms/ohio_individual/individual/2025/1040-bundle-original-fi.pdf
- Ohio Revised Code Section 322.02: https://codes.ohio.gov/ohio-revised-code/section-322.02
- 26 U.S.C. 121, Exclusion of gain from sale of principal residence (U.S. Code, GovInfo): https://www.govinfo.gov/content/pkg/USCODE-2023-title26/html/USCODE-2023-title26-subtitleA-chap1-subchapB-partIII-sec121.htm
- ORC 319.54, Fees of county auditor (Ohio Legislative Service Commission; read October 8, 2026): https://codes.ohio.gov/ohio-revised-code/section-319.54
Sources: the primary documents linked above, read on October 7, 2026. General information, not tax advice. Your own facts decide the outcome, and a tax professional or the state agency itself is the right place to confirm anything consequential.