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Please see Information Release IT 2008-02 entitled “Ohio Taxable Income and Deductions for Servicemembers and Civilian Spouses”, the “Ohio Income Tax for Military Servicemembers and Their Civilian Spouses” section of the individual income tax instructions, and the “Income Taxes and the Military” page on our website.

A military servicemember is a resident of their “state of legal residency.” This is generally the same as the servicemember’s “home of record” unless it is subsequently changed. The servicemember’s state of legal residency does not change based on military orders.

Ohio Income Tax

Generally, all income earned by Ohio residents is subject to Ohio individual income tax. However, Ohio law allows military servicemembers to deduct on Ohio Schedule A any active duty military pay and allowances that were received while the servicemember was stationed outside of Ohio. Thus, Ohio resident servicemembers stationed outside Ohio are not liable for Ohio income tax on their military pay and allowances.

However, military pay and allowances received by Ohio residents while stationed in Ohio are not eligible for this deduction, and thus are subject to tax.

You can use the following chart to determine how a resident military servicemember should treat his/her income for Ohio tax purposes:

See R.C. 5747.01(A)(21).


School District Income Tax

Generally, an Ohio servicemember who is a resident of a taxing school district is subject to school district income tax. However, if the servicemember is stationed outside of Ohio, then his/her military pay and allowances are not subject to school district income tax.

See R.C. 5748.01(E)(1) and (G)(1).

Ohio Income Tax

A nonresident servicemember cannot be taxed by Ohio on his/her military income, regardless of whether it is earned for service in Ohio or not. These amounts are deductible on Ohio Schedule A.

Additionally, a nonresident servicemember is entitled to a nonresident credit for any non-military income earned outside Ohio during the taxable year (e.g., bank interest from a savings account or personal investment income). However, a nonresident servicemember must pay Ohio tax on any non-military income that is based on activities or services in Ohio. These amounts are neither deductible nor eligible for Ohio’s nonresident credit. See R.C. 5747.05(A).

You can use the following chart to determine how a nonresident military servicemember should treat his/her income for Ohio tax purposes:


School District Income Tax

A nonresident servicemember is never liable for school district income tax.

See R.C. 5748.01(G)(1).

Ohio Income Tax

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. Since, all the academies are located outside Ohio, these individuals, regardless of their residency, can deduct any pay or allowances related to such service. Please note, individuals in the Reserve Officer Training Corps (ROTC) are not considered to be serving on active duty. 


School District Income Tax

Since, all of the academies are located outside Ohio, these individuals, regardless of their residency, are able to deduct any pay or allowances related to such service.

A servicemember's civilian spouse will retain his/her original state of legal residence, if the servicemember and spouse have the same state of legal residence and the spouse is only accompanying the servicemember as part of military orders. 

However, if the servicemember and civilian spouse have different states of legal residence, or the civilian spouse takes affirmative steps to change his/her domicile to the state in which the servicemember is stationed, then the civilian spouse will be domiciled in the new state.

Additionally, effective for tax years 2018 and forward, a civilian spouse can elect to have the same state of legal residence as the servicemember. This includes the tax year in which the couple was married, as well as any subsequent tax year during the marriage. 

Ohio Income Tax

An Ohio resident civilian spouse of a servicemember who resides in Ohio is liable for Ohio income tax. The civilian spouse’s non-Ohio sourced income is also taxed to Ohio, but is eligible for Ohio’s resident credit if the spouse was subject to, and paid tax on, the non-Ohio income in another state.

You can use the following chart to determine how a resident civilian spouse should treat his/her income for Ohio tax purposes:


School District Income Tax

An Ohio civilian spouse who is a resident of a taxing school district is subject to school district income tax.

Ohio Income Tax

A nonresident civilian spouse is entitled to a nonresident credit for non-Ohio income that the spouse earns during the taxable year (e.g., bank interest from a savings account or personal investment income). The civilian spouse’s Ohio-sourced income is taxable depending on whether the spouse and servicemember have the same state of legal residence (i.e. domicile), or different states of legal residence.

A nonresident civilian spouse cannot be taxed on his/her income, regardless of whether it is earned for services in Ohio or not, if:

  • The spouse and the servicemember have or elect to have the same state of legal residence outside Ohio; AND
  • The servicemember and spouse are in Ohio because of military orders.

However, the nonresident civilian spouse must pay Ohio tax if s/he earns income that is based on activities or services in Ohio, and his/her state of legal residence is different from the servicemember-spouse’s state of legal residence.

You can use the following chart to determine how a nonresident civilian spouse should treat his/her income for Ohio tax purposes:

See R.C. 5747.05(A).


School District Income Tax

A nonresident civilian spouse is never liable for school district income tax. See R.C. 5748.01(G)(1).

Employers should see the FAQs under the “Employer Withholding” subheading for more information on their withholding requirements for military servicemembers and their civilian spouses.

A servicemember who is exempt from Ohio income tax under federal law should request an exemption from Ohio withholding by submitting Ohio form
IT 4 to his/her employer.

The civilian spouse of a servicemember, who is exempt from Ohio income tax under federal law, should request an exemption from Ohio withholding from his/her employer by submitting Ohio form IT 4 to said employer.

See R.C. 5747.06 and Ohio Adm. Code 5703-7-06.

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)(23) and 5747.01(FF).

A surviving spouse and/or former spouse of a military servicemember receiving payments under the survivor benefit plan can deduct the income from the survivor benefit plan if it is included in his/her federal adjusted gross income.

R.C. 5747.01(A)(23).

Generally, you are required to file an Ohio individual income tax return if your Ohio income tax base (Ohio IT 1040, Line 5) is greater than $22,150. This typically applies to military servicemembers and their civilian spouses when you had income from other Ohio, “nonmilitary” sources such as:

  • Rental income from Ohio property;
  • Capital gains from the sale of Ohio property;
  • Ohio Lottery Commission prizes and awards; OR
  • Income from a pass-through entity doing business in Ohio.

If you are required to file an Ohio income tax return, you should respond to the notice by filing an Ohio IT 1040 and include copies of all your employer-issued W2s and 1099s. You may be able to deduct your military income on the return.

If you believe you are not required to file a return, you should do one of the following:

Ohio Residents

If you receive a “Failure to File” notice as an Ohio resident, you should return the notice with all of the following information:

  • Ohio IT-1040 with schedules;
  • Copy of employer issued W-2’s; AND
  • Copy of Orders (If stationed outside of Ohio).

Ohio Nonresidents

If you receive a “Failure to File” notice as a nonresident of Ohio, you should return the notice with the following information if your only income during the taxable year was military pay:

  • A completed IT 10. If you are an active duty servicemember, please check the designated box for military. If you are a civilian spouse, please check the designated box for civilian spouse; AND
  • A copy of all your employer-issued W-2(s) for the taxable year.

Ohio Residents

The taxability of your temporary duty assignment pay is based on where you are “stationed.”  Active duty servicemembers in the United States Army, Air Force, Navy, Marine Corps, or Coast Guard; the reserve components thereof; or the National Guard can generally deduct military pay and allowances received while they are stationed outside Ohio

For Ohio tax purposes, "stationed" refers to your permanent duty station, or where you are currently assigned and physically located under competent orders that do not specify the duty as temporary. “Stationed” does not include temporary periods of training lasting 30 days or less.

Thus, the temporary duty assignment pay is not taxable if the resident servicemember’s temporary duty assignment has him/her stationed outside Ohio:

  • For active duty; OR
  • For training lasting more than 30 consecutive days.

Otherwise, the resident servicemember’s temporary duty assignment pay is taxable.

See R.C. 5103.20, Article II(U).


Ohio Nonresidents

Regardless of where you are stationed, your temporary duty assignment pay is not taxed by Ohio.

Currently, honorably discharged veterans with a 100 percent service related disability, Medal of Honor recipients, and military retirees have full exchange privileges as recognition of the service made by those individuals. Effective November 11, 2017, all honorably discharged veterans of the Military Services will receive limited exchange privileges and be able to shop sales and use tax free online from a military exchange (no uniform items, alcohol, or tobacco products).

Pursuant to federal statute, no sales or use tax may be levied with respect to the sale, storage, or use of tangible personal property sold by the United States or any instrumentality of the United States to any authorized purchaser. A person is deemed to be an authorized purchaser only with respect to purchases which they are permitted to make from commissaries or exchanges under regulations created by the Secretary of Defense. 

Currently, the Department of Defense (DOD) Instruction Number 1330.21 – Armed Services Exchange Regulations includes an enclosure that outlines the “authorized patrons” and details each classification of individuals’ exchange privileges (Enclosure 6).  Additionally, DOD Directive-type Memorandum (DTM) 17-003 – Veterans Military Exchange Online Shopping Access Policy extended limited online military exchange shopping privileges to all honorably discharged veterans of the Military Services effective November 11, 2017. One of the requirements listed in the DTM was to incorporate this policy into DOD Instruction 1330.21. So, once the DOD Instruction 1330.21 is updated to identify this classification of individuals as an authorized purchaser or as long as the DTM remains effective, the Ohio Department of Taxation will not attempt to subject these sales to sales or use tax.

There is no true “statutory” exemption for members of the armed services. If the vehicle is purchased in Ohio by a member of the armed services who is a resident of Ohio, Ohio sales or use tax is due.

If the vehicle is purchased in Ohio by a member of the armed services who declares that he/she is a resident of another state or country, but will be registering the vehicle for use in Ohio while stationed here, Ohio sales or use tax is due.

If the vehicle is purchased in Ohio by a member of the armed services who declares that he/she is not a resident of Ohio and that the vehicle will be immediately removed from Ohio for titling and registration in the other state, Ohio sales or use tax is not due, unless the vehicle will be titled in one of the eight states where Ohio collects the sales tax. A nonresident affidavit must be provided by the purchaser. Use the ATPS exemption code “NR: Nonresident affidavit – immediate removal.”   

If the vehicle is purchased outside of Ohio by a member of the armed services who is a resident of Ohio and the vehicle is to be driven in Ohio, Ohio sales or use tax is due.  

If the vehicle is purchased outside of Ohio by a member of the armed services who is a resident of Ohio and the vehicle is to be driven outside Ohio, the Ohio Supreme Court has ruled that no Ohio sales or use tax is due. The Supreme Court did not indicate the amount of time that a vehicle had to be driven outside of Ohio to qualify, so the Department of Taxation has adopted the “six-month” rule in that the period of time must be more than six months (as evidenced by a copy of the individual’s military orders indicating out-of-state service for a period of at least six months after the purchase date). The vehicle must be titled in the name of the military person. Use the ATPS exemption code “CM: Conversion – military.”

If the vehicle is purchased outside of Ohio by a member of the armed services who is a resident of Ohio and the vehicle is or is to be driven outside of Ohio for less than six months (member of armed services being transferred to Ohio or is returning to Ohio upon separation from armed services), sales and use tax is due.

Additional Resources

Additional Resources