The short answer
Yes, Ohio taxes tips in 2026. The federal OBBBA tips deduction (up to $25,000) lowers your federal tax, but it does not lower your Ohio tax. Tips are taxed like other wages: 0% on the first $26,050 of Ohio taxable income and 2.75% above that.
Ohio's fixed-date conformity and S.B. 9
Ohio does not adopt federal changes automatically. ORC 5701.11 defines the Internal Revenue Code for Ohio purposes as the Code as it existed on that section's effective date, and the General Assembly moves that date by passing a bill. S.B. 9 of the 136th General Assembly, effective March 5, 2026, updated it to include federal changes made since March 7, 2025. OBBBA was enacted in July 2025, so it is inside that window.
Why conformity does not reach tips
Conformity decides which version of federal law Ohio uses. It does not change where the Ohio return starts. Ohio's IT 1040 begins on line 1 with federal adjusted gross income, and the instructions say that figure must match your federal AGI.
The tips and overtime deductions are not part of AGI. They are figured on Schedule 1-A, which starts from AGI, and subtracted on Form 1040 line 13b to reach federal taxable income. Ohio never uses that later figure, and it has no separate subtraction for tips or overtime. So even with full conformity, the deductions have no Ohio effect.
Worked example: $40K earner with $10K tips
David is a single filer who works as a valet in Columbus. He earns $30,000 in wages and $10,000 in qualified tips in 2026, well under the $150,000 federal phase-out.
Federal return
Federal AGI (wages + tips): $40,000
Standard deduction: -$16,100
Tips deduction (Schedule 1-A, line 13b): -$10,000
Federal taxable income: $13,900
Federal tax saved by the tips deduction: $1,200
Ohio return
IT 1040 line 1, federal AGI: $40,000 (the tips deduction was never in this number)
Ohio personal exemption: -$2,400
Ohio taxable income: $37,600
Zero bracket (first $26,050): $0 tax
Ohio tax at 2.75% on the rest: $318
David keeps his federal savings of $1,200. Of his Ohio tax, about $275 is on his tips, the same as if the federal deduction did not exist.
Local income taxes
Many Ohio cities, and some school districts, impose their own income taxes. City taxes generally apply to gross earned income, so tips are taxed locally as well, and the federal deduction does not change that either.
For take-home pay estimates, try the Ohio paycheck calculator. To see how other states handle the OBBBA deductions, visit the state-by-state tips and overtime tax map.