Moving from Canada to Ohio: A Low Flat State Rate and a City Tax in Every Major Metro

Ohio's three major metros each have a Canadian corridor: Columbus for JPMorgan Chase, Nationwide, and the data centre boom; Cleveland for the Cleveland Clinic and its healthcare sector; Cincinnati for Procter & Gamble, Kroger, and GE Aerospace. Ohio's tax picture is a state income tax that moved to a single flat rate of 2.75% for 2026, plus a municipal income tax in nearly every city that adds 1.8% to 2.5%, moderate sales tax, and no estate tax.

Key takeaways

• Ohio's state income tax is a flat 2.75% for 2026 above a zero bracket (the first $26,050 is tax-free).
• Municipal income taxes: Columbus 2.5%, Cleveland 2.5%, Cincinnati 1.8%, most suburbs 1.5% to 2.5%. Residents get a credit for tax paid to a work city, which may be partial.
• Combined sales tax runs 7.5% in Franklin County, 8% in Cuyahoga County, 7.8% in Hamilton County.
• Property tax is near 1.5% effective.
• No estate tax. Ohio starts from federal AGI and exempts Social Security; municipal taxes generally do not apply to retirement income.

The Canadian departure

Departure tax applies to non-registered investments, private company shares, crypto, and foreign property at fair market value on the day you leave. Canadian real estate, RRSPs, TFSAs, and pensions are excluded. Report on Form T1243, list holdings on Form T1161 if the total exceeds $25,000, and post security under Form T1244 to defer tax on illiquid assets. The rate is your province's: on a $300,000 unrealized gain, roughly $72,000 from Alberta and $80,000 from Ontario, Quebec, or BC. Provincial health coverage ends around your departure date; confirm the exact date with your plan and arrange US coverage to start the same month.

US federal side

Dual-status return in the arrival year, FBAR on Canadian accounts above $10,000 aggregate, Form 8938 above thresholds, and the RRSP treaty deferral federally. The TFSA loses its tax-free status the day you become a US person; close it before crossing. Equity compensation vesting after the move is split by working days between Canada and the US.

Ohio's side

Flat state income tax of 2.75% for 2026 above a zero bracket (2025 still carried a 3.125% bracket above $100,000, eliminated by the 2025 budget act); municipal income taxes of 2.5% in Columbus and Cleveland and 1.8% in Cincinnati, with most suburbs charging 1.5% to 2.5% and offering a full or partial credit for tax paid to a work city; sales tax 7.5% to 8% in the three metros; property tax near 1.5% effective; no estate tax. Ohio starts from federal AGI, exempts Social Security, and offers a retirement income credit. Municipal income taxes generally apply to earned income and business income, not to pension, interest, or dividend income.

The RRSP

Federally deferred under Article XVIII of the treaty and deferred for Ohio because the state starts from federal AGI. Withdrawals face 25% Canadian withholding on lump sums, 15% on periodic RRIF payments within the treaty limit, a US foreign tax credit federally, and Ohio's flat rate with a retirement income credit; municipal taxes generally do not apply to RRIF or pension income.

Who makes this move

Bay Street and Montreal finance staff to JPMorgan Chase's Columbus campus, Canadian clinicians and researchers to the Cleveland Clinic and University Hospitals, Canadian consumer goods and aerospace professionals to Procter & Gamble and GE Aerospace in Cincinnati, Canadian cloud engineers to central Ohio's data centres, and Canadian academics to Ohio State.

Worked example

A Toronto bank technology manager moves to Columbus on June 30 with $200,000 of unrealized gain in a non-registered account, $500,000 in an RRSP, and a Toronto condo sold in the departure year.

• Departure tax. $200,000 gain, $100,000 taxable, at about 53.5%: roughly $53,500.
• Condo. Sold as a resident under the principal residence exemption.
• RRSP. No tax on departure; federal and Ohio deferral; municipal tax does not apply to RRIF income.
• Columbus. State 2.75% plus Columbus 2.5%; combined top rate about 42.25%. HST 13% becomes sales tax 7.5%. Property tax on a $500,000 home around $7,500.

Official sources

"When you leave Canada, you are considered to have sold certain types of property (even if you have not sold them) at their fair market value (FMV) and to have immediately reacquired them for the same amount. This is called a deemed disposition and you may have to report a capital gain (also known as departure tax)." — Canada Revenue Agency, Leaving Canada (emigrants), https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/leaving-canada-emigrants.html

"For taxable years beginning in 2025: $0 – $26,050 — 0.000% of Ohio taxable nonbusiness income; $26,050 – $100,000 — $342 + 2.75% of excess over $26,050; $100,000 and above — $2,394.32 + 3.125% of excess over $100,000." — Ohio Department of Taxation, Annual Tax Rates, https://tax.ohio.gov/individual/resources/annual-tax-rates

"You will be considered a United States resident for tax purposes if you meet the substantial presence test for the calendar year. To meet this test, you must be physically present in the United States (U.S.) on at least: 31 days during the current year, and 183 days during the 3-year period that includes the current year and the 2 years immediately before that." — Internal Revenue Service, Substantial Presence Test, https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test

Practitioner note

Ohio's municipal tax is the item Canadians do not expect, and it has a wrinkle for suburb-to-city commuters: the work city taxes the wages, the home city taxes them again, and the home city's credit may be partial. We run the two-city calculation before the client picks a suburb.

Corridor guides

• Calgary to Columbus: Energy Data, the JPMorgan Corridor, and Ohio's Flat Tax Plus City Tax
• Montreal to Columbus: Fintech, the JPMorgan Corridor, and Ohio's Flat Tax Plus City Tax
• Ottawa to Columbus: Cybersecurity, Finance, and Ohio's Flat Tax Plus City Tax
• Toronto to Columbus: Banking, the JPMorgan Corridor, and Ohio's Flat Tax Plus City Tax
• Vancouver to Columbus: Tech, Data Centres, and Ohio's Flat Tax Plus City Tax

See also: Weighing Florida instead? See the Canada-to-Florida guide. Browse every corridor by city, province, and state.

Next step

Fairlight prepares the Canadian departure return, the first-year federal and state returns, and ongoing cross-border filings. See cross-border pricing or book a call.