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1. I am from Ohio and am currently serving on active duty in the Army. Am I subject to Ohio individual income tax and school district income tax, and would the answer be any different if I were serving in the National Guard or the reserves?
Yes, Ohio individual income tax applies to all military servicemembers of the active and National Guard or reserve components who are residents of Ohio and are stationed inside the state. School district income tax also applies if the service member’s domicile is within a school district that imposes the tax, even if the service member did not reside in the school district at any time during the taxable year.
Law Change for Taxable Years 2007 and Forward: You and all other service members, however, are affected by a change in law for taxable years beginning on and after Jan. 1, 2007. This law allows for the deduction of your military pay you receive for active duty service while you are stationed outside the state (see Resident Service Members Stationed Outside the State, below) if the military pay is included in your federal adjusted gross income. See division (A)(24) of Ohio Revised Code 5747.01. You must still file an Ohio individual, and if applicable, school district income tax return in order to qualify for the deduction.
You are an Ohio resident if Ohio is indicated as your state of legal residence (e.g., home of record from where you entered the military) in your military personnel record, whether or not you spent any time in Ohio during the taxable year. For purposes of Ohio income taxes, if you are a member of the military and if Ohio is indicated in your military personnel record as your state of legal residence, then you are domiciled in Ohio. This status does not change unless a service member takes action to change it by submitting Department of Defense form DD-2058, and this change is approved by the military. The approved DD-2058 is then placed in the service member's military personnel record.
Filing information is available in:
2011 Ohio income tax publication which contains the 2011 Ohio School District income tax instructions.
Visit The Finder to locate a school district number by address.
You can calculate a resident tax credit if any of your income was taxed by another state. For information about the resident tax credit, see the instructions for Schedule C in the 2011 Ohio income tax publication.
Resident Service Members Stationed Outside the State: 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.
Please note that under the November 2009 amendment to the Servicemembers Civil Relief Act, 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.
Examples of military pay and allowances that do qualify for the Ohio resident service member deduction include the following amounts, but only if the taxpayer receives the amounts while he/she is stationed outside Ohio:
Examples of military pay and allowances that do not qualify for this deduction include the following:
For more information:
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.
2. I'm in the Air Force stationed at Wright-Patterson AFB and claim that I'm domiciled in another state (e.g. New York is the state of legal residence on my military records). Am I liable for Ohio income tax and school district income tax on my military pay?
Ohio does not tax the military pay of nonresident servicemembers, but in order to avoid a billing notice from the state, you are strongly encouraged to complete and file an IT-10 form each year when you file your federal return (see Please note, below). If you have income in Ohio from any non-military source, you are liable for state income tax (see However, you will have to file, below).
If your state of legal residence in your military personnel record is not Ohio, you are a military nonresident and are not subject to state income and school district income tax on your military pay.
Nonresident military spouses are affected by a November 2009 amendment to the Servicemembers Civil Relief Act; please see FAQ #3.
Please note that the Ohio Department of Taxation annually issues tax assessments based on filing addresses for which no Ohio return is received. To avoid such an assessment, if your only income was military pay and interest and dividends, the department strongly encourages you to complete and file an IT 10 form each year when you file your federal return, if the federal return was filed using an Ohio address.
The IT-10 provides space for both you and your nonresident spouse to indicate military status as a reason for not filing an Ohio income tax return.
If you should receive a billing notice as a nonresident service member and your only income during the taxable year was military pay, and you receive a billing notice for that year, please return the notice with the following information:
However, you will have to file an Ohio income tax return if any of the following applies to you:
If you are required to file an Ohio income tax return, you can deduct your military income on line 2 of the Ohio income tax form IT 1040. By so doing, your income will not be subject to any Ohio personal income or school district income tax.
Military payroll authorities will generally withhold income tax for the 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. A servicemember who had state income tax withheld in error should have the military payroll authorities correct the state of legal residence in their military personnel record.
For more information:
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.
3. How are military spouses affected by the November 2009 amendment to the Servicemembers Civil Relief Act?
The Servicemembers Civil Relief Act of 2003, as amended on Nov. 11, 2009, is a federal law which provides that a state cannot consider a servicemember or his/her spouse to be a resident or to be domiciled in a tax jurisdiction simply because he/she is present in a tax jurisdiction — or absent from a tax jurisdiction — due to military orders of the servicemember, provided that the servicemember and spouse are domiciled in the same jurisdiction. Additionally, the 2009 amendment to the Act provides that the wage and salary income of the nonresident spouse of a servicemember, who is domiciled in a different tax jurisdiction and is residing in a tax jurisdiction solely due to the military orders of his/her spouse, is excluded from taxation by that jurisdiction on income earned for services performed or from sources within the jurisdiction. This provision does not apply to taxable years prior to 2009. However, the servicemember and spouse may be liable for income tax in their jurisdiction of domicile.
A servicemember's nonresident spouse, who is domiciled in the same jurisdiction as their servicemember spouse, who had Ohio income tax withheld and who claims exemption from Ohio income tax under the 2009 amendment to the Servicemembers Civil Relief Act should file an Ohio income tax return and claim a refund. The Department of Taxation may request proof of eligibility for the exemption in subsequent correspondence.
Please note that the Ohio Department of Taxation annually issues tax assessments based on federal filing addresses for which no Ohio return is received. To avoid such an assessment, the department strongly encourages you to complete and file an IT 10 form each year when you file your federal return, if the federal return was filed using an Ohio address. The IT-10 provides space for both you and your service member spouse to indicate military status as a reason for not filing an Ohio income tax return.
Military spouses may also file an exemption from withholding IT MIL-SP form with their Ohio employers. Please be advised that this form asks spouses to provide a copy of their military ID card as verification of status; this is specifically authorized by the Department of Defense.
Also note that Ohio-domiciled spouses of service members who reside with their spouses outside Ohio are presumed to retain their Ohio domicile. These spouses remain subject to Ohio state income tax and school district income tax, if their domicile is within a taxing school district.
For more information:
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.
4. I'm a Navy recruiter assigned to a recruiting station in Covington, Kentucky, but residing in Cincinnati with my nonmilitary spouse. My spouse works in Ohio. Both my spouse and myself are domiciled in California. Are either of us liable for Ohio income tax?
Neither you nor your spouse are liabile for Ohio income tax. However, every year when you file your federal income tax return, you should also file file an Ohio IT 10 form. This notifies the Ohio Department of Taxation of your status as California residents/ domiciliaries. Also, please see FAQ #3, above, for information concerning how nonresident military spouses are affected by a November 2009 amendment to the Servicemembers Civil Relief Act.
(Note: Both you and your spouse may be liable for California income tax.)
For more information:
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.
5. I own a store in Kenton, Ohio and I employ the wife of a local Army recruiter. She has told me that she and her husband are not residents of Ohio. How do I handle Ohio state income tax withholding for her wages so that I'm in compliance with the federal military spouse tax provisions?
A 2009 amendment to the federal Servicemembers Civil Relief Act provides that if a servicemember and his/her spouse are domiciled in the same state, their domicile does not change when they move to another state pursuant to the servicemember's military orders. You and your employee should complete Ohio form IT MIL-SP and submit it to the Ohio Department of Taxation. If you have an eligible military spouse working for you, you are not required to withhold Ohio income tax nor report her wages to the Ohio Department of Taxation. You should determine what the withholding and reporting requirements are for her state of domicile, and comply accordingly.
For federal income tax purposes, her federal income taxes must be withheld from her income following the normal business rules.
Please note that the Ohio form IT MIL-SP asks the spouse to provide a copy of his/her military ID card as verification of status. This is specifically authorized by the Department of Defense.
The Ohio form ITMIL-SP applies only to Ohio state income taxes. Municipal income tax in Ohio is not administered by the state. It is administered separately by each municipality that has enacted a tax. Questions about municipal income tax should be directed to the appropriate municipality.
For more information:
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.
6. I'm retired from the Air Force and reside in Ohio. What tax obligations do I have for my military retirement pay, and if I die before my spouse dies, how does Ohio tax income from the military survivor benefit plan?
Law Change for Taxable Years 2008 and Forward: Effective for taxable years beginning after Dec. 31, 2007, military retirement pay of taxpayers who retired from service in the active or reserve components of the U.S. Army, Navy, Air Force, Marine Corps, Coast Guard, or from the National Guard, and SBP benefits, are exempt from Ohio income tax and from Ohio school district income tax. Eligible taxpayers can use Schedule A of Ohio tax form IT 1040 to deduct such retirement pay included in federal adjusted gross income.
Eligible taxpayers can request that their Ohio withholding be adjusted by contacting the Defense Finance and Accounting Service at www.dfas.mil or (800) 321-1080.
This deduction also applies to such amounts received by the surviving spouse or the former spouse of each military retiree who is receiving payments under the survivor benefit plan. Please note that child support receipts, regardless of the source, are not included in federal adjusted gross income; so these amounts are not deductible.
Federal civil service retirees who received federal service credit for military service are allowed to deduct only that portion of their pension attributable to military service. A formula for this deduction can be found in the Ohio income tax instructions under the Schedule A deductions. The formula is illustrated in the example below.
Example: The taxpayer has included in federal adjusted gross income (line 1 of the Ohio income tax return, form IT 1040) $60,000 which the taxpayer received as a federal civil service pension. The taxpayer has 15 years of military service and 45 years of combined military service and civilian employment with the U.S. government. The fraction is 15/45 = 1/3. The taxpayer can deduct $20,000 on Ohio Schedule A for Military Retirement Income: 1/3 X $60,000.
Note: Because military retirement income is deducted from federal adjusted gross income and thus is not included in Ohio adjusted gross income for post-2007 years, military retirement income does not qualify for the Ohio retirement income credit.
For Taxable Year 2007 and Prior Years: Ohio residents must pay Ohio income tax on their military retirement income for taxable year 2007 and prior. However, these taxpayers are eligible for a retirement income credit of up to $200, based on the amount of retirement income received during the taxable year. This credit can be found in Schedule B of the Ohio income tax return. Income which a spouse receives from a military survivor benefit plan is also treated as retirement income and is also eligible for the credit of up to $200.
Military retirement income and survivor benefit plan income is also subject to school district income tax if the taxpayer resides in a school district that levies the “traditional method” income tax, which is the same base as the state income tax. Military retirement income and survivor benefit plan income is not subject to school district income tax if the taxpayer resides is a school district levying the alternative, “earned income only method” income tax, which is based on earned income only.
To determine if the school district in which you are domiciled has an income tax during the taxable year, contact your local school district or County Auditor.
The retirement income credit does not apply to the school district income tax.
For more information:
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.
7. My son is domiciled in Ohio but is currently a midshipman at Annapolis. Is the pay that he receives while stationed there eligible for the pay deduction for military active duty while stationed outside Ohio for taxable years 2007 and after?
Yes. Cadets at the U.S. service academies, specifically the Military Academy, the Air Force Academy, the Coast Guard Academy, and midshipmen at the Naval Academy, are considered to be serving on active duty under the provisions of 38 United States Code section 101 (21). All of the academies are located outside Ohio, and cadets and midshipmen are eligible for the deduction from federal adjusted gross income for pay received while stationed at these facilities. (Note: this provision does not extend to service in the Reserve Officer Training Corps.) See division (A)(24) of Ohio Revised Code 5747.01.
For more information:
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.
8. My former spouse is currently serving in the Air Force in California. She is sending me monthly child support payments from her military pay. Are these payments eligible for the deduction for military active duty while stationed outside Ohio for taxable years 2007 and after?
No. Child support receipts are not taxable income, regardless of source, and are not included in federal adjusted gross income (FAGI). Since these amounts are not included in FAGI, they are not eligible for the deduction.
For more information:
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.
9. I am divorced, and my ex-husband is retired from the Army. In the divorce settlement, I was awarded a portion of his monthly retired pay. Does this payment meet the eligibility requirement for the exemption of military retired pay for taxable years 2008 and after?
Yes. Any portion of military retirement pay which an ex-spouse directly receives from a retirement fund and which is part of a divorce settlement for spousal support is eligible for the deduction for military retired pay to the extent this pay (i) is included in the recipient’s federal adjusted gross income and (ii) would qualify for the deduction allowable by division (A)(26) of Ohio Revised Code 5747.01 if the retired military person had received the income. Please note that the Ohio Department of Taxation may require a copy of the divorce agreement and the 1099-R as verification for the deduction.
For more information:
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.
10. I am a civilian contractor for the U.S. Army, stationed in Afghanistan. Am I eligible for any military pay exemptions or exclusions, and would the answer be different if I were a federal civilian employee or in the merchant marines?
No, you are not eligible under any of these circumstances. Federal tax law does not provide for a combat zone exemption for civilian defense contractors, federal civilian employees or members of the merchant marines. (Ohio honors all provisions of federal law related to combat zones for servicemembers.) Also, the deduction of military pay for Ohio resident military service members who are stationed outside the state is specifically limited in Ohio law to those serving in the military and does not apply to those serving in a defense contractor, federal civilian employee or merchant marine status. Individuals in one of these statuses are liable for state income tax in their state of domicile, as well as income tax in any other state in which they have earned income.
For more information:
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.
11. I am eligible for the Ohio Veterans Bonus. How is this bonus income treated for income tax purposes?
The Ohio Veterans Bonus is not taxable as part of either federal or Ohio adjusted gross income. Bonus recipients do not need to report it as income on either their federal or Ohio income tax return.
Normally, income tax applies to military pay if it is earned for service outside a combat zone. But the Internal Revenue Service determined that the bonuses are regarded as gifts and are thus excluded from federal adjusted gross income. This ruling is detailed in a Sept. 1, 2010 letter to the Ohio Attorney General.
Ohio had already decided that state income taxes did not apply to the veterans bonus. The exemption was a provision of House Bill 48, enacted by the General Assembly in March 2010 and signed into law by Governor Ted Strickland on April 2, 2010. The ruling by the IRS means that the bonus is exempt from federal as well as state income tax. The bonus is also not taxable income for purposes of school district income tax.
The Ohio Veterans Bonus applies to any Ohio resident veteran of an armed military service who served on active duty for purposes other than training between Aug. 2, 1990 and March 3, 1991 or at any time since Oct. 7, 2001. Eligible veterans will receive $100 for each month spent on active duty service in the Persian Gulf, Afghanistan or Iraq during these times, up to a maximum of $1,000. Veterans who served in other areas are eligible for $50 for each month of active duty service, up to a maximum of $500. Family members of service members who lost their lives in these conflicts are eligible for a benefit of $5,000 plus the benefit the deceased veteran would have received up to a maximum of $1,500. Families of missing or prisoner of war service members may be eligible for a bonus of $5,000. Complete details, and how to apply, are at http://www.veteransbonus.ohio.gov.
For more information:
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.
