Toledo local tax guide
Who pays Toledo's local tax
Toledo's tax follows the job first. If you work in Toledo, 2.5% is withheld whether you live in Sylvania, Perrysburg, Oregon, or Monroe County, Michigan. Ohio's reciprocity agreement with Michigan removes Ohio state tax for Michigan residents, not Toledo's city tax. Toledo residents owe 2.5% on all earned income, with credit for tax paid to other municipalities capped at 2.5%. If you live in Toledo and work in a city charging more, the excess is not credited. If you work somewhere with no city tax, you owe Toledo the full 2.5%.
How Toledo's 2.5% tax works
Toledo, the Lucas County seat and Ohio's fourth-largest city with about 265,000 residents, levies a flat 2.5% on wages, commissions, and business net profit. The Division of Taxation administers it directly, so Toledo is not a RITA or CCA member.
Toledo's municipal code allows credit only up to the Toledo rate. The 2025 resident return caps the line for tax withheld by other municipalities at 2.5%, and a separate line covers tax paid directly to other cities or JEDDs, which requires attaching that city's return.
The city taxes Medicare wages, so traditional 401(k) deferrals do not reduce Toledo tax even though they cut federal and Ohio tax.
Worked example: $75,000 in Toledo
A single filer with a $75,000 Toledo job pays $7,670 in federal income tax, $1,288 to Ohio, $4,650 in Social Security, and $1,088 in Medicare. Toledo adds $1,875. Take-home pay is $58,429, or $4,869 a month.
A Michigan resident with the same Toledo job pays the same $1,875 to Toledo, but owes state income tax to Michigan rather than Ohio after filing Form IT 4NR.
Without a city tax, the Ohio worker would keep $60,304. At $150,000 the Toledo tax grows to $3,750 and take-home pay is $106,683.
Filing with the Division of Taxation
Toledo offers a shorter EZ Toledo form alongside the full individual return; check its instructions to see whether your income fits. Nonresidents who need a refund of Toledo tax withheld for days worked elsewhere use the nonresident return.
If you live in Toledo and worked remotely for an employer based in another city, attach the returns from any other municipalities you claim credit for. A Toledo resident with a job across the Michigan line usually has no Ohio city tax withheld at all, so set aside 2.5% or make estimated payments.
How Toledo compares with other Ohio cities
Toledo's 2.5% ties Columbus, Cleveland, Akron, Dayton, and four others on this site, with only Youngstown's 2.75% higher. At $75,000 Youngstown costs $188 more than Toledo.
In northwest Ohio, Lima charges 1.5%, or $1,125 at $75,000, which is $750 less than Toledo. Cincinnati's 1.8% costs $1,350, which is $525 less.
Tips for Toledo paychecks
Michigan commuters: IT 4NR does not stop city tax
Form IT 4NR ends Ohio state withholding for Michigan residents, but Toledo's 2.5% still comes out of every check.
Toledo residents working in Michigan
With no Ohio city withholding on a Michigan job, the Toledo tax is due at filing. Ask payroll for courtesy withholding.
Use EZ Toledo if it fits
Residents with straightforward wage income may qualify for the shorter EZ Toledo return.
Attach other-city returns
Credit for tax paid directly to another city or JEDD requires a copy of that return with your Toledo filing.