State-by-State Guide to Taxes on Retirees - Ohio
Tool | November 2019

State-by-State Guide to Taxes on Retirees

Ohio

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The Bottom Line
Flag of Ohio

Not Tax Friendly

The Buckeye State exempts Social Security benefits from state income taxes and also allows retirees to claim a tax credit of up to $200 on other types of retirement income. Ohio’s income tax rates range from a low of 1.98% to a high of 4.997% (on income over $213,350). While localities and some school districts may levy their own income taxes, pension income is generally exempt. Residents 65 and older may qualify for a homestead exemption.

State Sales Tax

5.75% state levy. Localities can add as much as 2.25%, and the average combined rate is 7.15%, according to the Tax Foundation.

Income Tax Range

Low: 1.98% (on income over $10,850 of taxable income for 2018, over $21,750 in 2019)

High: 4.997% (on taxable income over $217,400).

Effective tax rate: 1.81% for single filers, 4.83% for joint filers.

Municipalities can levy income taxes, too; the average local rate is 2.5%, per the Tax Foundation.

Social Security

Benefits are not taxed.

Exemptions 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.

Property Taxes

In Ohio, residents pay an average of $1,641 in taxes per $100,000 of assessed home value.

Tax breaks for seniors: 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 $25,000 of their home’s market value from all local property taxes. In 2019, eligibility for new exemptions is limited to qualifying taxpayers (by age) with Ohio adjusted gross income of $32,800 or less; the income threshold will be annually adjusted for inflation. Taxpayers who were already granted the exemption will continue to receive it.

Vehicle Taxes

Sales tax is due when vehicle title is transferred.

Inheritance and Estate Taxes

None.

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