Individual Income Tax

Deduction for Military Stationed Outside Ohio

All Ohio residents, including those serving in the military, are subject to the Ohio individual income tax and school district income tax, if they reside within a school district that levies the tax. The military automatically withholds pay for a servicemember's state of legal residence (e.g., home of record from where the servicemember entered the military) that is noted in his/her military personnel record. This does not change unless a servicemember takes action to change it, and this change is approved by the military. Service members can only make such a change by submitting Department of Defense form DD-2058. The approved form will be placed in his/her military personnel record.

However, military servicemembers who are stationed outside Ohio are eligible for the deduction of military pay received for active duty service while stationed outside the state, if the military pay is included in federal adjusted gross income (see division (A)(24) of Ohio Revised Code 5747.01). Servicemembers must still file an Ohio individual, and if applicable, school district income tax return in order to qualify for the deduction. This deduction applies to taxable years beginning on and after Jan. 1, 2007.

 

Under the November 2009 amendment to the Servicemembers Civil Relief Act, please note that an Ohio resident who accompanies his/her military servicemember spouse to a duty station in another state remains subject to Ohio income tax and school district income tax.

The term “stationed” refers to an Ohio resident servicemember’s permanent duty station. For purposes of this exemption, "permanent duty station" has the same meaning as specified in Ohio Revised Code 5103.20, Article II, Subparagraph (U), that is, it means the military installation where an active duty servicemember – or, concerning this exemption, an Ohio resident servicemember in the National Guard or military reserve forces – is currently assigned and is physically located under competent orders that do not specify the duty as temporary. Periods of training in which a servicemember, either individually or as part of a unit, departs from his/her permanent place of duty and then returns following the completion of the training, is not included in the definition of “stationed.” However, periods of active duty outside Ohio for purposes other than training, or periods of training greater than 30 days outside Ohio, as described below, qualify a servicemember for this exemption.

Examples of military pay and allowances that do qualify for this deduction include the following amounts, but only if the taxpayer receives the amounts while he/she is stationed outside Ohio:

  • Military pay and allowances received while a member of the active component of the U.S. Armed Forces and assigned to a permanent duty station outside Ohio.
  • Military pay and allowances received while a member of the active component of the U.S. Armed Forces, who is assigned to a permanent duty station inside Ohio, only for periods of duty outside Ohio for purposes other than training, or periods of training greater than 30 days outside Ohio.
  • Military pay and allowances received while a member of the National Guard or the reserve components of the U.S. Armed Forces in an active duty status outside Ohio, or for periods of training greater than 30 days, outside Ohio.
  • Military pay and allowances received while a member of a unit of the National Guard or the reserve components of the U.S. Armed Forces under federal mobilization orders under which the unit mobilizes for training at a non-Ohio location followed by an operational deployment to any non-Ohio location.
  • Military pay and allowances received by cadets at the U.S. service academies, specifically, the Military Academy, the Air Force Academy, the Coast Guard Academy, and by midshipmen at the Naval Academy. Cadets and midshipmen are serving on active duty under the provisions of 38 United States Code section 101 (21) and are eligible for this deduction for the pay they receive while stationed at these facilities to the extent that this pay is included in federal adjusted gross income (line 1 on the Ohio income tax return, IT 1040). However, this deduction is not available for pay received for service in the Reserve Officer Training Corps.

Examples of military pay and allowances that do not qualify for this deduction include the following:

  • Military pay and allowances received while a member of the active component of the U.S. Armed Forces who is assigned to a permanent duty station inside Ohio and who departs Ohio for a period of temporary duty for unit or individual training of 30 days or less (e.g., training exercises, basic and advanced training courses, and additional skill training courses).
  • Military pay and allowances received while a member of the National Guard or the reserve components of the U.S. Armed Forces in an active duty for training status who departs Ohio for a period of temporary duty for unit or individual training of 30 days or less (e.g., unit annual training, training exercises, basic and advanced training courses, and additional skill training courses).
  • Military pay and allowances received for service in a combat zone because that pay is not included in federal adjusted gross income (line 1 on Ohio form IT 1040).
  • Service members eligible for this deduction may request that the military exempt them from Ohio withholding only during the period of their service outside the state by submitting Ohio form IT 4 MIL to their military finance office.

For taxable years 2006 and prior, the deduction described above is not available.

Have questions?

Additional details concerning military tax issues are discussed in our Frequently Asked Questions - Military.

You can reach us by e-mail at Military-Info@tax.state.oh.us. Our toll-free number for individual taxpayer inquiries is (800) 282-1780, and the toll-free number for forms is (800) 282-1782.