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State Income Tax Guide for Military Members



General : Ohio honors all federal tax laws regarding Ohio resident military servicemembers, to include the exclusion of pay earned in combat zones.

Military Personnel

Ohio resident military service members stationed inside the state are subject to Ohio state income tax; they are also subject to school district income tax, if their domicile is within a school district which imposes the tax on all types of income.

Effective for taxable years beginning Jan. 1, 2007, Ohio exempts from state income taxes military pay earned while the service member (including members of any guard or reserve unit) is stationed outside the state. This exclusion applies to pay received while the individual is stationed at installations outside Ohio, or deployed on an operational mission outside Ohio. The exclusion does not apply to periods of training while the service member is stationed with a unit in Ohio and either returns to or with this unit from the period of training. The service member can also request, using the Ohio Tax Dept. form IT 4 MIL (available online under "Tax Forms" at tax.ohio.gov) and submitted to his/her local military finance office, that the Dept. of Defense not withhold Ohio income tax for pay which she/he will receive while stationed outside the state. Ohio resident servicemembers are required to start or continue full state withholding while stationed in Ohio.

Retired Military Members

For taxable year 2007 (filed in 2008) and prior years, military retired pay and Survivor Benefit Plan benefits received by Ohio residents are subject to state income tax as retirement income. A graduated tax credit of up to $200 is available for this income. A credit of $50 per return is allowed for all Ohio residents 65 and older. Retired and SBP pay is also subject to school district income tax if the taxpayer resides in a school district which imposes the tax on all types of income.

Effective for taxable years beginning after Dec. 31, 2007, military retired pay from the active or reserve components of the U.S. Army, Navy, Air Force, Marines, Coast Guard, and the National Guard, and SBP benefits are exempt from state income tax and school district income tax. Federal civil service retirees who received federal service credit for military service are allowed to deduct only that portion of their pension attributable to military service.

Military disability retired pay may be exempt from state and school district income taxes, if the retiree has not yet reached an attained age after which proof of the continued disability is necessary to continue to receive the disability retirement pay.

For more information regarding military service and Ohio taxes, see "Military" under "Ohio Taxes--Individual Income" at tax.ohio.gov, or call (800) 282-1780.

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