How Ohio taxes retirement income
Ohio does not tax Social Security benefits. Pensions and 401(k)/IRA withdrawals are taxed as ordinary income. Social Security benefits are fully exempt from Ohio income tax (deducted out on the Schedule of Adjustments; R.C. 5747.01(A)(5)). Pension, 401(k), and traditional IRA distributions are NOT exempt, they flow through federal AGI into Ohio taxable income and are taxed at the regular rate. The only offset is a modest, non-refundable Retirement Income Credit (R.C. 5747.055): $0-$200 on a sliding scale that tops out at $200 for $8,000+ of qualifying retirement income, available only if MAGI less exemptions is under $100,000; a similarly capped Lump Sum Retirement Credit exists for one-time distributions, and a $50 Senior Citizen Credit applies at 65+. These are credits against tax owed, not an income exemption.
Retirement income tax in Ohio, at a glance
| Income type | Taxed by Ohio? |
|---|---|
| Social Security | No |
| Pensions | Yes |
| 401(k) / IRA withdrawals | Yes |
| Estate / inheritance tax | None |
| Avg. property tax rate | 1.36% of home value |
Does Ohio tax Social Security benefits?
No. Ohio does not tax Social Security benefits.
Does Ohio tax pensions and 401(k) or IRA withdrawals?
Yes. Ohio taxes pension income and 401(k)/IRA withdrawals as ordinary income. Social Security benefits are fully exempt from Ohio income tax (deducted out on the Schedule of Adjustments; R.C. 5747.01(A)(5)). Pension, 401(k), and traditional IRA distributions are NOT exempt, they flow through federal AGI into Ohio taxable income and are taxed at the regular rate. The only offset is a modest, non-refundable Retirement Income Credit (R.C. 5747.055): $0-$200 on a sliding scale that tops out at $200 for $8,000+ of qualifying retirement income, available only if MAGI less exemptions is under $100,000; a similarly capped Lump Sum Retirement Credit exists for one-time distributions, and a $50 Senior Citizen Credit applies at 65+. These are credits against tax owed, not an income exemption.
For the mechanics of required withdrawals in retirement, see what is an RMD.
Sources
- Ohio taxation of retirement income (Social Security, pensions, 401(k)/IRA): Ohio Department of Revenue / Taxation.