OH
Does Ohio tax tips and overtime?
The federal deduction and the Ohio deduction are separate questions. Here is where Ohio actually lands, and why.
How Ohio builds its tax base
Ohio starts from your federal adjusted gross income. Both deductions are below-the-line — they reduce federal taxable income but leave AGI untouched — so neither reaches this state's return automatically. Anything you get here had to be legislated separately.
Tips in Ohio
Still taxedOhio's base begins at federal AGI — the Department of Taxation's 2025 IT 1040 instructions say "Line 1 – Federal Adjusted Gross Income. Enter the amount from line 11a of your 2025 federal 1040... Line 1 of your Ohio income tax return must match your federal adjusted gross income (AGI) as defined in the Internal Revenue Code" (see also R.C. 5747.01(A)) — so the below-the-line §224 deduction never reaches Ohio AGI, and the Ohio Schedule of Adjustments contains no tip deduction; House Bill 209 (Rep. Lorenz), which would exempt tips from state, municipal and school district income tax, remains pending and unenacted.
Source: Ohio Department of Taxation, 2025 Ohio IT 1040 / SD 100 Instruction Booklet, "Line 1 – Federal Adjusted Gross Income" and Ohio Schedule of Adjustments · last reviewed
Overtime in Ohio
Still taxedSame federal-AGI starting point defeats the §225 deduction, and Ohio has enacted no state deduction: House Bill 39 of the 136th General Assembly would amend R.C. 5747.01 to create a state income tax deduction for overtime wages, but as of August 2026 it has had only its first hearing in House Ways and Means and has not been enacted.
Source: Ohio House Bill 39, 136th General Assembly ("Allow state income tax deduction for overtime wages") — pending in committee, not enacted · last reviewed
Whatever your state does, your payroll taxes do not change
Both deductions reduce income tax only. Social Security and Medicare are still charged on the same wages, in every state.