Active-duty pay
Fully Exempt
Active-duty pay exempt for OH residents stationed outside OH.
State Guide · OH
Ohio — Military Tax Treatment
Ohio's active duty exemption covers members stationed outside OH — great for those on PCS orders. Guard members drilling in Ohio pay state income tax on drill pay. Retirement is fully exempt. Watch Ohio's municipal income tax system — city-level tax may apply on top of state.
Tax treatment at a glance
Guard & Reserve drill pay
Taxed
Ohio's active duty exemption is station-dependent — members must be stationed OUTSIDE Ohio. Guard members drilling in Ohio are in-state and do not qualify. Routine drill pay is taxable OH income. Also check city/municipal income tax where you live.
Military retirement pay
Fully Exempt
Military retirement pay fully exempt.
The numbers · verified for tax year 2025
Top marginal rate
3.125%
Retirement-pay exemption
Full
Military retired pay is 100% deductible on the Ohio Schedule of Adjustments (subtracted from Ohio AGI), so it is effectively fully exempt; active-duty pay is also deductible for Ohio residents.
Standard deduction
Ohio has no standard deduction (it uses personal/dependent exemptions). The June 2025 budget bill (HB 96) cut the top rate from 3.5% to 3.125% retroactive to 2025, moving to a flat 2.75% in 2026.
VA disability compensation
Always tax-free
Federally tax-free under 38 USC § 5301. No state taxes VA disability compensation as income — Ohio included.
Survivor Benefit Plan (SBP)
Follows retirement
Ohio exempts military retirement — SBP annuities are generally exempt.
Federal rules that override state law
SCRA — Servicemembers Civil Relief Act
Active-duty servicemembers pay state income tax only to their state of legal domicile — not the state where they are stationed. If you are from Texas and stationed in Ohio, Ohio cannot tax your military pay. This applies during all active duty periods and during Guard/Reserve mobilizations on federal (Title 10) orders.
MSRRA — Military Spouses Residency Relief Act
Military spouses can maintain their home-state domicile even when living in a different state due to their servicemember's orders. A spouse who is a Texas resident following their servicemember to Ohio can keep Texas as their tax domicile and avoid Ohio state income tax on their wages.
Guard & Reserve — the SCRA gap
SCRA pay protections apply during federal (Title 10) activation orders. During routine drill weekends and state-only activations, Guard and Reserve members are state residents serving in their home state — SCRA does not protect their drill pay from state income tax. Whether Ohio exempts that pay is the state-specific question answered above.
Filing watch-outs
- 01Active duty exemption: OH IT-1040 Schedule of Adjustments — document your duty station outside OH
- 02Guard members: drill pay is taxable OH income even though retirement is fully exempt
- 03Ohio has a municipal income tax system — verify city-level tax rules where you reside
Veteran-specific tax benefits
100% disabled veteran homestead exemption.
Official authority
https://tax.ohio.gov/ ↗State tax law changes annually. Verify current rules with the Ohio Department of Revenue before making any tax decision.
Ohio military tax — common questions
Does Ohio tax military retirement pay in 2026?
Ohio fully exempts military retirement pay. Military retirement pay fully exempt.
Does Ohio tax active-duty military pay?
Ohio fully exempts active-duty military pay for state residents. Active-duty pay exempt for OH residents stationed outside OH. Under the SCRA, Ohio can only tax the military pay of service members who are legally domiciled in Ohio — not those merely stationed there.
Does Ohio tax National Guard and Reserve drill pay?
Ohio taxes Guard and Reserve drill pay. Ohio's active duty exemption is station-dependent — members must be stationed OUTSIDE Ohio. Guard members drilling in Ohio are in-state and do not qualify. Routine drill pay is taxable OH income. Also check city/municipal income tax where you live.
Is VA disability compensation taxed in Ohio?
No. VA disability compensation is federally tax-free under 38 U.S.C. § 5301, and no state — including Ohio — taxes it as income.
If I'm stationed in Ohio but claim another state, can Ohio tax my military pay?
No. Under the Servicemembers Civil Relief Act (SCRA), active-duty pay is taxable only by your state of legal domicile, not the state where you are stationed. If your domicile is elsewhere, Ohio cannot tax your active-duty military pay. Military spouses get the same protection under the MSRRA.
Related tools
Other state guides