State retirement tax · Ohio
Retirement tax rules for Ohio residents (2026 guide)
For 2026 Ohio taxes nonbusiness income at a flat 2.75% on everything above $26,050 and nothing below it (HB 96). Social Security and military retirement pay are exempt; pensions and IRA withdrawals are taxed, with a small retirement income credit and a homestead exemption for income-qualified 65+ homeowners.
By Mindaugas Laucius · Last reviewed October 21, 2026
Rate on retirement income
2.00%
Taxes Social Security?
No
Approx. tax on $90k retirement income
$1,200
Pension carve-outs
Yes
Quick figures: a single filer with $90,000 of income, $30,000 of it Social Security.
The 2026 flat tax
HB 96, the 2025 budget, cut the rate on income over $100,000 to 3.125% for 2025 and then to a flat 2.75% for 2026. Income up to $26,050 stays untaxed. Business income keeps its own 3% rate, with the first $250,000 exempt.
Social Security and military retirement pay are not taxed. Pensions, annuities and IRA or 401(k) withdrawals are, though a retirement income credit of up to $200 is available when modified AGI is under $100,000.
Homestead exemption
Homeowners 65+ (or permanently disabled, or qualifying surviving spouses) whose income is no more than $41,000 for tax year 2026 can exempt the taxes on up to $29,700 of their home's market value. People who received the exemption in 2013 keep it without the income test.
Local taxes
Many Ohio cities and school districts levy their own income taxes, but city taxes generally reach wages, not pensions or Social Security. The state sales tax is 5.75%, with county add-ons.
Worked examples
What each extra $10,000 of IRA income costs
- Above $26,050 of Ohio income, each dollar is taxed at 2.75%.
- $10,000 × 2.75% = $275.
$275 per extra $10,000 of withdrawals.
A retiree under the line
- $24,000 of pension income + $28,000 of Social Security (exempt).
Ohio taxable income stays under $26,050: no Ohio income tax.
Recent and pending changes
- 2026: HB 96 moved Ohio to a flat 2.75% on nonbusiness income above $26,050 (3.125% top rate in 2025).
Run your own numbers — pick Ohio in the calculator’s Taxes tab for a year-by-year estimate. Or compare all 50 states and DC.
Thinking about a move? The free state-to-state retirement tax comparison puts Ohio next to any other state on your own income.
Ohio questions
Does Ohio tax Social Security?
No. It's deducted on the Ohio return.
Do Ohio cities tax my pension?
Generally not — municipal income taxes apply to earned income such as wages, not retirement benefits.
Is the homestead exemption automatic at 65?
No. Apply with your county auditor; new applicants must meet the income limit ($41,000 for 2026).