Ohio LLC Taxes

LLC Pass-Through Taxation

By default, LLCs don't pay taxes directly. Instead, the LLC members report the income (or losses) on their personal Form 1040 tax return. This is called pass-through taxation — tax responsibility "passes through" the LLC to its owners.

How Are LLCs Taxed in Ohio?

By default, a Ohio LLC is taxed by the IRS based on the number of members:

• An LLC with 1 owner (Single-Member LLC) is taxed like a Sole Proprietorship
• An LLC with 2+ owners (Multi-Member LLC) is taxed like a Partnership

These are the "default" statuses — automatically applied based on member count. You can also elect to have your LLC taxed as a Corporation (S-Corp or C-Corp) by filing extra paperwork with the IRS.

Single-Member LLC (default)

The IRS treats Single-Member LLCs as Disregarded Entities — the LLC doesn't file its own federal return. Instead, the owner reports LLC income on their personal Form 1040 (Schedule C if owned by an individual).

Multi-Member LLC (default)

Multi-Member LLCs file a Form 1065 Partnership Return and issue a Schedule K-1 to each member. Each member then reports their share of profits on their personal Form 1040.

Electing Corporate Taxation

• S-Corporation: File Form 2553 with the IRS. Can reduce self-employment taxes once the LLC has consistent profits (generally $70,000+ net income per member). Speak with an accountant first.
• C-Corporation: File Form 8832 with the IRS. Uncommon for small LLCs. Primarily useful for large employers offering healthcare fringe benefits.

Ohio State Income Tax

Ohio has a state income tax at rates of 0%–3.5% (graduated; income under $26,050 is exempt). LLC members report their share of LLC profits on their Ohio state tax return.

Single-Member LLC owners file Ohio Form IT 1040 and include LLC income. Multi-Member LLCs file Ohio Form IT 1140 (Pass-Through Entity Return) and issue Ohio K-1s to members. Ohio also imposes a Commercial Activity Tax (CAT) — see below.

Contact the Ohio Department of Taxation at 800-282-1780 for more information.

Ohio Special LLC Taxes

Ohio Commercial Activity Tax (CAT)

Ohio imposes a Commercial Activity Tax (CAT) on businesses with Ohio gross receipts over $150,000 per year.

• $150,000–$1,000,000: Minimum $150 tax
• Over $1,000,000: 0.26% on gross receipts
• LLCs with less than $150,000 in annual Ohio gross receipts are exempt from the CAT entirely

Local Income Tax

You and/or your LLC may also need to file and pay income taxes with your local municipality (city, county, etc.). Contact your local government or hire an accountant to confirm local requirements.

Ohio Sales Tax

If your LLC sells taxable products (and sometimes services) in Ohio, you may need to collect sales tax and register for a Seller's Permit (also called a resale license or sales tax permit).

Ohio's state sales tax rate is 5.75%. County rates add 0.75%–2.25%, bringing most totals to 6.5%–8%.

Register for Ohio Seller's Permit →

Contact the Ohio Department of Taxation at 888-405-4089 with questions.

Ohio LLC Payroll Taxes

If your Ohio LLC has employees, you must handle payroll taxes, which include:

• Federal income tax withholding
• Ohio state income tax withholding
• Social Security and Medicare taxes (FICA)
• Federal unemployment tax (FUTA)
• Ohio state unemployment tax (SUTA)

Payroll calculations are complex — most LLC owners hire a payroll service or accountant.

Ohio Tax Agency Contact

Ohio LLC Taxes — FAQs