Ohio retirement taxes at a glance (2026)
| State income tax | Flat 2.75%Starting in 2026, Ohio taxes nonbusiness income above $26,050 at a flat 2.75%. Income up to $26,050 is not taxed. Most cities also levy a local income tax. |
|---|---|
| Social Security | Not taxedOhio does not tax Social Security benefits. |
| Pensions | Partly taxedPensions are taxed, but taxpayers with modified AGI under $100,000 get a retirement income credit of up to $200, plus a $50 senior credit at age 65. |
| 401(k) and IRA withdrawals | Partly taxedIRA and 401(k) withdrawals are taxed but count as retirement income for the same credit of up to $200 (modified AGI under $100,000). |
| Government pensions | Partly taxedGovernment pensions are taxed like other pensions and qualify for the same small retirement income credit. |
| Military retirement pay | Not taxedMilitary retirement pay is not taxed in Ohio. |
| Estate tax | No |
| Inheritance tax | No |
| Property tax help for seniors | Homeowners 65+ with household income of $40,000 or less can get a homestead reduction of up to $29,000 in taxable value. Disabled veterans rated 100% can get up to $58,000 with no income limit. |
| Sales tax | State sales tax is 5.75%; the average combined rate is about 7.29% and the maximum is 8.75%. |
Recent changes and good to know
- HB 96 (signed June 30, 2025) cut the top rate to 3.125% for 2025 and created a flat 2.75% rate from 2026.
- From 2026, filers with income over $500,000 lose personal exemptions and the joint filing credit (the threshold was $750,000 in 2025).
How to lower your retirement taxes in Ohio
- Mix your income sources. Roth IRA withdrawals are tax-free at the federal level and generally in Ohio too, so a Roth conversion before retirement can cut state tax later. Try the Roth conversion calculator.
- Watch federal Medicare costs. Large IRA withdrawals can raise your Medicare premiums. Check the 2026 IRMAA brackets.
- Think about your heirs. See what your IRA will really cost your family with the Family Tax Rate calculator.
- Comparing states? These have no state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming.
Frequently asked questions
Does Ohio tax retirement income?
Mostly yes. Ohio does not tax Social Security or military pay, but it taxes pensions and IRA/401(k) withdrawals at 2.75%, with only a small credit.
Does Ohio tax Social Security?
Ohio does not tax Social Security benefits.
Does Ohio tax pensions?
Pensions are taxed, but taxpayers with modified AGI under $100,000 get a retirement income credit of up to $200, plus a $50 senior credit at age 65.
Does Ohio tax 401(k) and IRA withdrawals?
IRA and 401(k) withdrawals are taxed but count as retirement income for the same credit of up to $200 (modified AGI under $100,000).
Does Ohio tax military retirement pay?
Military retirement pay is not taxed in Ohio.
Sources (last verified 2026)
- Ohio Revised Code 5747.055 Retirement income credit — Ohio Laws (LSC) (2026-09-24)
- Ohio Budget Bill Enacts Flat Income Tax, Other Changes — GBQ (2025-07-09)
- Ohio Tax Facts for 2026 — AARP (2026-03-17)
- State Individual Income Tax Rates and Brackets, 2026 — Tax Foundation (2026-02-17)
Educational content only, not tax, legal or investment advice. Plans and tax laws change; confirm details with your employer's plan documents or your state revenue department. Smart Financial Lifestyle is not affiliated with any employer named on this site.