The state of taxes income at the following rates;

  • The First $5,200 is taxed at .537%
  • $5,201 to $10,400 at 1.074%
  • $10,401 to $15,560 at 2.148%
  • $15,561 to $20,900 at 2.686%
  • $20,901 to $41,700 at 3.222%
  • $41,701 to $83,350 at 3.760%
  • $83,351 to $104,250 at 4.296%
  • $104,251 to $208,500 at 4.988%
  • $208,501 to above at 5.421%

Social Security Benefits are not taxed by the state of Ohio.

Other Retirement Income that is Exempt

There are four different tax credit retirees in Ohio. You can qualify for a credit from $25 to $200 depending on the time of retirement income. If you are 65 or older you will qualify for an additional $50 credit on each tax return. If you are a retiree and decide to take your distribution in lump sum you may be eligible for a lump sum income credit. If you decide to take the lump sum credit you may not claim the retirement income credit in future years. You also may not take the $50 senior credit if you claim the lump sum credit. If you are receiving a Military pension you are eligible to deduct income that is not already excluded or deducted.

If you work in an Ohio municipality you may be levied an income tax, the tax rate can range from .4% to 3% of your income. If you receive a pension, disability or income from dividends or interest you are exempt from the local tax. You may be required to pay a school tax, of .25% to 2% of your income, this is not typical as about only 30% of residents have to pay this. Depending on the school district you may be taxed by normal Ohio income standards which excludes income from retirement, interest, dividends and capital gains, or you may be taxed by earned income.

How does residency affect taxes?

If you are a resident of Ohio you are required to pay Ohio on any income, no matter the source or place earned, you may be subject to credits depending on taxes paid in other jurisdictions. If you are a non-resident you only pay on income earned in Ohio.

What defines residency?

You are considered a resident if you maintain a domicile in the state of Ohio. Being domiciled depends on the number of periods of contact in the state during the tax year, which is a calendar year for most people. Contact periods are considered being away from your home state abode and spending a part of two consecutive days in Ohio, abodes generally are a place where one lives. Typically this is the number of nights spent in state.