FAQs - Individual Income Tax

What deductions are available under Ohio law to retired military servicemembers?

Generally, retired servicemembers are entitled to deduct “retired personnel pay” that is related to service in the uniformed services, the reserve components thereof, or the national guard.

If the retired personnel pay is tied to a plan such as the federal civil service retirement system or the federal employee’s retirement system, the portion of that income that is based on the retired servicemember’s time in the uniformed services is eligible for the Ohio income tax deduction. “Uniformed services” include the Army, Navy, Air Force, Marine Corps, Coast Guard, the commissioned corps of the National Oceanic and Atmospheric Administration, and/or the Public Health Service. 

Example: Joe served in the Army for 10 years and then worked for the U.S. National Parks Service for an additional 20 years before retiring; a total of 30 years of federal service time. Joe’s total federal pension is $100,000, $90,000 of which is included in his federal adjusted gross income. In calculating his Ohio deduction, Joe should divide 10 by 30, and then multiply that amount by $90,000 [$90,000 x (10/30)]. Thus, Joe can deduct $30,000, or 1/3 of the portion of his retired personnel pay included in federal adjusted gross income.

R.C. 5747.01(A)(26) and 5747.01(GG).