State guides · OH

How Ohio taxes retirement income

Some 2026 figures pending confirmation  Tax year 2026 · research last updated October 2, 2026

At a glance

Tax rates

Brackets apply to Ohio taxable income. Other filing statuses are in the rules reference.

Social Security

Ohio doesn't tax Social Security benefits.

Pensions, IRAs and 401(k)s

Ohio has no general exclusion for pension, IRA or 401(k) income in 2026. It's taxed at the rates above, after any deductions and credits.

Roth conversions

A Roth conversion counts as taxable income for Ohio.

Capital gains

Taxed like other income, at the rates above. .

Credits and relief for older residents

• Retirement income credit (Schedule of Credits line 2; R.C. 5747.055(B)). Per RETURN (one credit even if joint). Requires MAGI less exemptions < $100,000 and retirement income 'received on account of retirement' from a pension, retirement or profit-sharing plan (booklet lists traditional IRAs and 401(k)s) and included in Ohio AGI. Amounts deducted on the Schedule of Adjustments (Social Security, military retirement) don't count. Credit by combined retirement income: $0-500: $0; $501-1,500: $25; $1,501-3,000: $50; $3,001-5,000: $80; $5,001-8,000: $130; over $8,000: $200. Not indexed. Cannot be claimed after electing the lump sum retirement credit. Income limit: MAGI less exemptions < $100,000 (cliff)
• Senior citizen credit (line 4; R.C. 5747.055(F)). $50 per RETURN if taxpayer (or spouse) is 65 or older at end of tax year, MAGI less exemptions < $100,000, and the lump sum distribution credit has never been taken. Income limit: MAGI less exemptions < $100,000 (cliff)
• Lump sum retirement credit (line 3; R.C. 5747.055(C)-(E)). Elective, one-time, in lieu of the retirement income credit forever after. For a total lump-sum distribution on account of retirement from a qualified plan, MAGI less exemptions < $100,000. Credit = Table 2 credit on (retirement income / expected-remaining-life multiple from Table 1) x multiple; unused amount carries forward per worksheet. Table 1 multiples by age at year end (e.g., 65: 20.0, 70: 16.0, 75: 12.5). Income limit: MAGI less exemptions < $100,000
• Lump sum distribution credit (line 5; R.C. 5747.055(G)). Age 65+, total lump-sum distribution from a qualified plan, MAGI less exemptions < $100,000, once per lifetime. Credit = $50 x Table 1 multiple for age (e.g., age 65: 20.0 x $50 = $1,000). Taking it forfeits the $50 senior citizen credit in this and all future years. Income limit: MAGI less exemptions < $100,000
• Exemption credit (line 9; R.C. 5747.022). $20 per exemption claimed if MAGI less exemptions < $30,000. Income limit: MAGI less exemptions < $30,000
• Joint filing credit (line 12; R.C. 5747.05(E)). Joint filers where EACH spouse has >= $500 of 'qualifying income' (Ohio AGI other than interest, dividends/distributions, capital gains, rents/royalties; Social Security and other subtracted items don't count — so pensions and IRA distributions DO count). MAGI < $500,000 from 2026 (R.C. 5747.05(E), eff. 9/30/2025; $750,000 in 2025). Credit = % of tax before this credit by MAGI less exemptions: $0-25,000: 20%; $25,001-50,000: 15%; $50,001-75,000: 10%; $75,001+: 5%; max $650. Income limit: MAGI < $500,000 (2026+; R.C. 5747.05(E))

Local income taxes

Two layers. (1) Municipal income taxes (most cities/villages, typically 1%-2.5%) apply to wages and net business profits only; under R.C. 718.01 they exclude pensions, IRA/retirement distributions, Social Security, interest, dividends and capital gains, so they rarely affect a fully retired household. (2) School district income taxes (SD 100; ~200 districts, rates ~0.25%-2%): 'traditional base' districts tax Ohio taxable income (which INCLUDES pension/IRA distributions, interest, dividends and capital gains; SS still excluded), while 'earned income base' districts tax only wages/SE income (retirees generally owe nothing). District of residence on Dec 31 governs. Needs a per-district rate/base lookup to model.

More detail from our research notes

H.B. 96 (136th GA, 2025) made 2026 a single 2.75% rate above $26,050 (with the $332 cliff base) and lowered the exemption cutoff to MAGI $500,000. Brackets (R.C. 5747.02(A)(5)) and exemption amounts (5747.025(C)) are indexed by the GDP deflator each August, but H.B. 96 Section 757.120(A) suspends both adjustments for taxable years 2025 and 2026 (LSC final analysis p. 457), so 2026 = $26,050 threshold, $332 base and the 2025 exemption tiers $2,400/$2,150/$1,900. Indexing resumes for TY2027: in August 2027 the Tax Commissioner raises the $26,050 threshold by the calendar-2026 GDP deflator increase (nearest $50), recomputes the $332 base (= 1.27448% x threshold) and raises the exemptions (upward to $50); never downward. The MAGI tiers ($40,000/$80,000) and the $500,000 cutoffs are not indexed. All age tests are age at Dec 31. MAGI = Ohio AGI + business income deduction add-back (see IT 1040 instructions). Retirement income credit and senior credit are per return, not per person, and are small (max $200 + $50). Roth conversions are included in federal and Ohio AGI; whether a conversion counts as retirement income 'received on account of retirement' for the credit is not addressed (it doesn't matter above $8,000 of other retirement income because the credit caps at $200).

Pending confirmation

These points were still being confirmed against Ohio's published 2026 forms when this page was built. Most are waiting on forms the state publishes around the turn of the year.

5 items

• Published 2026 Ohio IT 1040ES worksheet (ites-instructions-fi.pdf, re-checked 2026-10-02) still prints the 2025 schedule ($342 + 2.75% to $100,000; $2,394.32 + 3.125% above). R.C. 5747.02(A)(3)(c) as amended by H.B. 96 (LSC final analysis p. 456) is $332 + 2.75% over $26,050 for 2026; statute used. Confirm on the 2026 IT 1040 booklet (expected Dec 2026-Jan 2027, the 2026 IT 1040 booklet at https://dam.assets.ohio.gov/image/upload/tax.ohio.gov/forms/ohio_individual/individual/2026/it1040-booklet.pdf (same path as the 2025 booklet)).
• Whether a Roth conversion is 'retirement income received on account of retirement' for the retirement income credit (no Department guidance found).
• School district tax base/rates per district not captured; the traditional-base vs earned-income-base description is from general knowledge, not a fetched primary source.
• Municipal income tax exclusions (pensions, retirement distributions, SS, interest, dividends, capital gains not taxed under R.C. 718.01 'income' definitions) stated from general knowledge — not verified against R.C. 718.01 text in this pass.
• Line 44: Taxtirement has one premium total, so a household with anyone 65+ treats all premiums as Medicare-era (line 3, under the 7.5% floor); a younger spouse's Marketplace premiums would be fully deductible on line 1.

Sources

Every figure comes from these documents, mostly the state's own forms, instructions and statutes.

1. 2026+ rate schedule ($332 + 2.75% over $26,050), 2025 schedule, indexing rule; R.C. 5747.02 (eff. 9/30/2025): (A)(3)(c) 2026+ schedule; (A)(5) August GDP-deflator indexing of income amountshttps://codes.ohio.gov/ohio-revised-code/section-5747.02
2. Personal exemption tiers and $500,000 MAGI cutoff for 2026; R.C. 5747.025 (eff. 9/30/2025): exemption tiers, < $500,000 MAGI from 2026, (C) indexing rounded up to $50https://codes.ohio.gov/ohio-revised-code/section-5747.025
3. Retirement income credit schedule, lump sum credits, senior citizen credit ($50)https://codes.ohio.gov/ohio-revised-code/section-5747.055
4. 2025 IT 1040 / SD 100 instructions: exemption table, Social Security deduction (line 16), Schedule of Credits (retirement, senior, lump sum, joint filing, exemption credits), Tables 1 and 2, 2025 brackets and worked examplehttps://dam.assets.ohio.gov/image/upload/v1767095693/tax.ohio.gov/forms/ohio_individual/individual/2025/it1040-booklet.pdf
5. 2026 Ohio estimated tax worksheet (shows $1,900 exemption for estimating and exemption = 0 if line 3 >= $500,000; its bracket table appears stale)https://dam.assets.ohio.gov/image/upload/v1735926006/tax.ohio.gov/forms/ohio_individual/individual/2026/ites-instructions-fi.pdf
6. H.B. 96 LSC final analysis (tax), pp. 455-457: 2026 flat 2.75% over $26,050 ($332 base); Section 757.120(A) suspends bracket and exemption indexing for taxable years 2025 and 2026; joint filing credit and exemptions barred at MAGI over $500,000 from 2026https://www.lsc.ohio.gov/assets/legislation/136/hb96/en0/files/hb96-tax-bill-analysis-as-enacted-136th-general-assembly.pdf
7. R.C. 5747.05(E) (eff. 9/30/2025): joint filing credit kept, lesser of $650 or the MAGI-less-exemptions percentage; MAGI must be under $500,000 from 2026https://codes.ohio.gov/ohio-revised-code/section-5747.05

Taxtirement's Ohio calculation is also checked against a second, independent implementation on 1,000 random households. How we check our numbers.

This page summarizes Ohio's 2026 rules as Taxtirement applies them, for education and planning. It isn't tax advice, and it doesn't cover every situation (for example part-year residents, businesses or military-only provisions). Rules change; check the state's current instructions, or a tax professional, before you act. Spotted something wrong? Tell us.