State-by-State Guide to Taxes on Retirees
Tool | December 2020

Ohio State Tax Guide for Retirees

State tax rates and rules for income, sales, property, estate, and other taxes that impact retirees.

Ohio

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The Bottom Line
Flag of Ohio

Not Tax Friendly

As with many states, lower-income retirees in the Buckeye State don't pay much in income taxes. But that isn't always true with higher-income seniors. Ohio exempts Social Security benefits from state income taxes for everyone. However, the slate of tax credits for other types of retirement income don't apply if your base income exceeds $100,000. Localities and some school districts may levy their own income taxes, too.

Property taxes are well above average in Ohio as well. Residents 65 and older may be able to exempt some of their home's value from Ohio's steep property taxes. However, there's an income threshold for this property tax break, too.

Sales taxes in the state are relatively modest. That helps keep Ohio out of the "least tax-friendly" category. And there are no estate or inheritance taxes to worry about.

Income Tax Range

Low: 2.765% (on taxable income from $25,001 to $44,250)

High: High: 3.99% (on taxable income over $110,650)

Cities and school districts in Ohio can also impose local income taxes.

Taxation of Social Security Benefits

Social Security benefits are not taxed by the state.

Tax Breaks for Other Retirement Income

Military pensions and Railroad Retirement benefits are exempt.

Ohio also has four tax credits for retirees with a state tax base of $100,000 or less. The retirement income credit is worth $25 to $200, depending on the amount of qualifying income from a pension or retirement plan (including 401(k) plans and IRAs). In addition, taxpayers age 65 and older can claim the senior citizen credit, which is worth $50 per tax return. The lump-sum retirement credit is for taxpayers who receive a lump-sum distribution on account of retirement from a pension or retirement plan. The lump-sum distribution credit is for taxpayers age 65 or older who receive a lump-sum distribution from a pension or retirement plan. Claiming one credit or exemption may impact the ability to claim others.

Sales Tax

5.75% state levy. Localities can add as much as 2.25%, and the average combined rate is 7.22%, according to the Tax Foundation.

Groceries: Exempt
Clothing: Taxable
Motor Vehicles: Taxable
Prescription Drugs: Exempt

Real Property Taxes

A homestead exemption is available for qualified homeowners who are at least 65 years old, permanently and totally disabled, or at least 59 years old and the surviving spouse of a deceased taxpayer who had previously received the exemption. Qualified homeowners are permitted to exempt up to $25,000 of their home's market value from all local property taxes. In 2020, eligibility for new exemptions is limited to qualifying taxpayers (by age) with Ohio adjusted gross income of $33,600 or less (it will be$34,200 in 2021 after the annual adjustment for inflation). Taxpayers who were already granted the exemption will continue to receive it.

Annual Car Taxes and Fees

No annual vehicle tax or fee is imposed.

Estate and Inheritance Taxes

No estate or inheritance tax.

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