State and federal income tax laws contain special provisions for members of the military and their families. Details on some of the major issues facing military families during the income tax filing season can be found below.
For more details regarding income taxes and the military, visit the state Web site at tax.ohio.gov,click on Individual Income Tax and scroll down to "Income Taxes and the Military."
You can also reach them by e-mail at Military-Info@tax.state.oh.us or toll-free at(800) 282-1780
Ohio Resident Military Personnel
Military pay and allowances for Ohio resident servicemembers who are stationed inside Ohio, and their spouses, will continue to be subject to Ohio individual income tax. These amounts will also be subject to school district income tax if the servicemember was domiciled in a taxing school district – even if the servicemember did not reside in the school district at any time during the taxable year.
Resident Military Personnel Stationed Outside Ohio
Military pay earned while on active duty and stationed outside of Ohio is exempt from Ohio income tax and may be deducted to the extent that it is included in federal adjusted gross income.
Ohio Revised Code section 5747.01(A)(24) provides that for taxable years beginning on and after Jan. 1, 2007 an Ohio resident servicemember can deduct active duty military pay and allowances that are included in federal adjusted gross income if those amounts are received for active duty service while the servicemember is stationed outside Ohio. The term "stationed" refers to an Ohio resident servicemember’s permanent duty station. 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, are 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, qualify a servicemember for this exemption.
Nonresident Military Servicemembers and Their Spouses
A November 2009 federal law exempts military spouses who are not residents of a state where they are living with their spouse -from the income taxes of the state, provided they are a resident of the same state as their spouse. However, nonresident military and nonresident spouses serving in Ohio are strongly encouraged to file Ohio form IT 10 each year to avoid a possible billing notice from the state of Ohio. You must also file by May 31, 2014, Ohio form IT DA, Affidavit of Non-Ohio Residency/Domicile for Taxable Year 2013. Ohio form IT 10 and the affidavit are available on our Web site at tax.ohio.gov.
National Guard and Reserves
Ohio resident members of the National Guard and reserves are entitled to the deduction for military pay received while stationed outside the state, if eligible. Also, resident members of the National Guard and reserves are eligible for certain tax extensions and other benefits, if stationed in a combat zone. The uniformed services military retirement pay received for Ohio National Guard and reserves service is also exempt from Ohio income taxes.
Ohio Resident Veterans Bonus
You do not have to include in federal adjusted gross income any bonuses that the Ohio Department of Veterans Services paid to, or made on behalf of, resident veterans of the Persian Gulf, Afghanistan and Iraq conflicts during the taxable year. Payments that the state of Ohio makes under the Ohio Veterans Bonus Program are excludable from the gross income of the recipients for federal income tax purposes. Therefore, the taxpayer cannot deduct from Ohio adjusted gross income any portion of the bonus because no portion of the bonus is included in federal adjusted gross income. Click here for more info Ohio Veterans Bonus
Deductions to Income (Line 45g of state return)
Military Retirement Income
Retirement pay received for service on military active duty or the National Guard or reserves, as well as pay received by a surviving spouse through the Survivor Benefit plan, has been exempt from the Ohio income tax since 2008.
Taxpayers who retired from service in the active or reserve components of the U.S. Army, Navy, Air Force, Marine Corps, Coast Guard or National Guard can deduct their military retirement income to the extent that income is not otherwise deducted or excluded in computing federal or Ohio adjusted gross income. Taxpayers who served in the military and received a federal civil service retirement pension are also eligible for a limited deduction if any portion of their federal retirement pay is based on credit for their military service. These retirees can deduct only the amount of their federal retirement pay that is attributable to their military service.
If you are eligible for this limited deduction, refer to your federal civil service retirement benefit handbook to determine the number of years of your military service. Divide the number of years of military service by the total number of years of combined military service and civilian employment with the U.S. government. Take this fraction and multiply it by the amount of your federal civil service pension you have included on line 1 of this return. The resulting number is the amount of your federal civil service pension that you can deduct on line 39b..
Military Injury Relief Fund
Also enter on this line military injury relief fund amounts you reported on line 1 (federal adjusted gross income). You do not have to include in federal adjusted gross income, and you cannot enter on line 39b, those military injury relief fund amounts you received on account of physical injuries or psychological injuries, such as post-traumatic stress disorder, if those injuries are a direct result of military action in Operation Iraqi Freedom or Operation Enduring Freedom. But you must include on lines 1 and 39b any other military injury relief fund amounts you received.
For additional information on Ohio Income Tax Information for the military: click here