The Roth IRA in Ohio

Ohio taxes a Roth conversion at a flat 2.75% for tax year 2026 — the lowest state rate a conversion faces in any income-tax state this series has covered so far. No Ohio city can add a cent to that. But the school district you live in can add 0% to 2% on top, depending on which of two tax bases it elected — and that election, not the state rate, is the largest variable on this page.

This is the eighth state guide in this series, and Ohio is the first one where the local layer decides more than the state does. The state answer is a single number, brand new and fully phased in. The local answer splits in two directions at once: a municipal income tax — Columbus’s 2.5% included — can never reach an IRA distribution or a conversion, while the school district income tax can take up to 2% of the same dollars, or nothing, depending on an election the district made when its tax was enacted.

Run the arithmetic once and the shape of the page falls out. A $100,000 conversion costs $2,750 in Columbus, which levies no school district income tax; $4,750 in a 2.00% traditional-base district; and $2,750 again in an earned-income-base district across the district line, whose tax cannot see a conversion at all. That $2,000 local spread is worth more than the last two state rate cuts combined — $750 on the same conversion. And whichever answer your address produces on the way out, the municipal side runs the other way on the way in: Ohio cities tax pre-tax and Roth 401(k) deferrals identically, adding pre-tax deferrals back into taxable qualifying wages — the paycheck money the city always sees is the mirror image of the IRA money it never sees. Both halves of that story get their own sections below.

Ohio Roth report card

The same thirteen dimensions score every state in this series. Each verdict traces to the dataset at the end of this page; the workbook carries the identical card with its authorities.

Ohio’s brand-new flat tax, and the $26,050 line that decides who pays it

Ohio finished a multi-year rate collapse on the eve of this page. The top rate on nonbusiness income was 3.5% for tax year 2024, fell to 3.125% for 2025, and for taxable years beginning in 2026 the brackets are gone entirely: HB 96, the state budget act of the 136th General Assembly, signed June 30, 2025 and effective September 30, 2025, leaves a single flat 2.75% above a zero band. Nothing about it is contingent. Georgia’s falling rate, one state back in this series, depends on revenue tests certified every December; Ohio’s statute simply sets 2.75% for 2026 and every year after, with no further steps, no triggers and nothing left to phase in.

Rate verified as of 2026-08-02

The statutory table for 2026 has one line. Taxable nonbusiness income at or below $26,050 owes nothing; above that, the tax is $332.00 plus 2.75% of the excess. The $332.00 is a fixed first-bracket amount with a hard edge — crossing the band by a single dollar triggers all of it — but it is a one-time structural quirk, not a rate. For anyone whose other income already exceeds $26,050, every conversion dollar is taxed at exactly 2.75%: a $100,000 conversion costs $2,750, computed in one step, with no surcharge, no high-income recapture, and no Ohio-specific spread election to look for, because none exists.

The zero band deserves suspicion before trust. $26,050 is hardcoded in the statutory table and has been unchanged since TY2022 — the same figure appears on the Department of Taxation’s own 2022 rate table — because successive budget acts have suspended bracket indexing since TY2023, and the statute’s adjustment provision bars the tax commissioner from adjusting the bracket downward. Treat it as a fixed line, not an inflation-tracking one: it shelters the first $26,050 of taxable nonbusiness income in 2026 exactly as it did four years ago, and nothing in current law moves it.

A sourcing note for anyone checking this page against the state’s own websites: as of our verification date, ODT’s Annual Tax Rates page still stops at tax year 2025 — its own heading says the tables run “for 2005 through 2025” — and the 2026 IT 1040 instructions do not exist yet. The controlling source for every 2026 figure above is therefore the statute itself, R.C. §5747.02(A) as amended by HB 96, not a Department table. The TY2025 numbers the Department’s page does show — $342.00 plus 2.75% between $26,050 and $100,000, then $2,394.32 plus 3.125% over $100,000 — are the prior year’s law: correct for a 2025 return, wrong for 2026 planning.

Authority: O.R.C. §5747.02(A) as amended by HB 96 (136th G.A., eff. 9/30/2025); ODT Annual Tax Rates page (accessed 2026-08-01, shows through TY2025); ODT TY2024 rate table ($2,394.32 + 3.50% over $100,000)

Personal exemptions shave the first dollars before the table applies, and a conversion works against them twice. The published 2025 amounts run $2,400 per exemption at Ohio modified adjusted gross income of $40,000 or less, $2,150 from $40,001 to $80,000, and $1,900 from $80,001 to $749,999; the 2026 indexed amounts are not yet published. Ohio MAGI is simply Ohio adjusted gross income plus any business income deduction added back — nothing else — so conversion income raises it dollar-for-dollar and can push a household down a tier. And one change is already law for 2026: HB 96 eliminates the exemptions entirely, and the joint filing credit (worth up to $650) with them, at MAGI of $500,000 or more — so a mega-conversion now costs a household its exemptions and that credit on top of the 2.75%, a new secondary cliff on the order of a few hundred dollars.

One more rate floats around Ohio articles and does not apply here. Since 2016 Ohio has taxed business income — income from a trade or business, after a $250,000 business income deduction — at a separate flat 3%. Aggregators regularly conflate the two tracks. A Roth conversion is not income from a trade or business: the Department’s own IT NRC instructions classify pensions, annuities and IRA distributions as nonbusiness income, citing R.C. 5747.20(B)(6). Conversion dollars take the 2.75% nonbusiness rate, the business income deduction cannot shelter a single one of them, and any calculator applying 3% — or the deduction — to conversion income is wrong.

Authority: O.R.C. §5747.025 as amended by HB 96; O.R.C. §5747.05(E); O.R.C. §5747.01 (MAGI definition); O.R.C. §5747.02(A)(4)(a); 2025 IT 1040 instructions (exemption table; IT NRC line 11, per R.C. 5747.20(B)(6))

Paying as you go: two safe harbors, and an annualization rule the form forgot

Ohio expects estimated payments once your liability net of withholding exceeds $500, on the familiar four dates — April 15, June 15 and September 15, 2026, and January 15, 2027 — now paid on a single OUPC voucher that covers both the state tax and any school district tax. The safe harbor is the lesser of 90% of the current year’s tax or 100% of the prior year’s, the prior-year option being available only if a 2025 Ohio return was filed. Withholding is the cleanest cover of all: the statute deems tax withheld from compensation to have been paid in equal amounts on each due date, so a late-year withholding increase on an IT 4 reaches back and covers the earlier quarters automatically.

A December conversion raises the classic worry: were the April, June and September installments underpaid the moment the conversion happened? Ohio’s answer lives in an odd gap between statute and form. The pre-printed IT/SD 2210 computes required installments as flat cumulative 25%, 50%, 75% and 100% of the safe-harbor amount, and contains no annualized-income worksheet at all. But R.C. §5747.09 itself excuses the interest penalty at any due date where the tax paid so far covers at least 90% of the year’s liability computed by annualizing income received through the end of the month before the payment was due. Income annualized through March, May and August contains no December conversion — so the first three quarters stand on their own, and a sufficient January 15 payment covers the rest. That is functionally the federal Schedule AI result, claimed by statute rather than by worksheet: the exception is statute-supported and form-unsupported, and nothing on the form computes it for you.

Authority: O.R.C. §5747.09; ODT Estimated Payments page (TY2026 due dates, $500 threshold); 2025 Ohio Estimated Income Tax instructions (“lesser of” worksheet); Ohio IT/SD 2210 (no annualized-income worksheet on the form)

The city can’t touch it — and the paycheck rule that cuts the other way

The municipal income tax is the reflexive objection to converting in Ohio: Columbus charges 2.5%, and several hundred cities and villages levy something. The objection dissolves on the statute. Since HB 5 (2014) made the municipal base uniform for tax years beginning in 2016, a municipality may levy an income tax only “in accordance with the provisions and limitations specified” in Chapter 718 of the Revised Code (R.C. §718.04(A)), and the base Chapter 718 permits for an individual is qualifying wages plus net profits, minus exempt income. Exempt income (R.C. §718.01(C)(3)) covers pensions, retirement benefit payments, payments from annuities and “similar payments made to an employee or to the beneficiary of an employee under a retirement program or plan,” and intangible income — interest, dividends, capital gains — is exempt separately. An IRA distribution is exempt income in every Ohio municipality, and a Roth conversion is an IRA distribution. RITA, which administers the tax for more than 300 municipalities, lists “IRA distributions” by name among non-taxable income, alongside pension distributions, interest, dividends and capital gains.

We swept the edge cases rather than assuming. Joint economic development districts and zones — the JEDD and JEDZ arrangements that tax business parks outside city limits — levy “subject to Chapter 718” by statute (R.C. §715.72(F)(5)(b) for JEDDs, §715.691 for JEDZs), so the same exempt-income rule applies inside them. And the only voter-approved grandfather that survived HB 5 lets certain municipalities tax an S corporation shareholder’s distributive share (R.C. §718.01(C)(14)(b)-(c), elections held in 2003 and 2004); it cannot reach retirement income. A $100,000 conversion owes exactly $0 of municipal income tax everywhere in Ohio — the opposite of the New York City answer earlier in this series.

Then the same statute cuts the other way, and both halves belong in the same breath. The municipal wage base — “qualifying wages” — is Medicare wages under IRC §3121(a), which already include both pre-tax and Roth elective deferrals, and R.C. §718.01(R)(2)(c) adds back any 401(k), 403(b) or 457 employee deferral not already captured. Employers must withhold municipal tax on the full amount (R.C. §718.03). At Columbus’s 2.5%, a $24,500 deferral bears $612.50 of city tax whether it goes in pre-tax or Roth — the one choice municipal law is precisely neutral about. The exit side is symmetric too: the chapter’s exempt “pension” is defined to exclude “employee contributions and elective deferrals” (R.C. §718.01(YY)), the statute’s way of saying the city taxes the deferral once, going in, and exempts the payout coming out — for both account types.

Which yields the sentence that organizes Ohio’s municipal layer: Ohio cities never see your IRA money coming out, and always see your paycheck money going in — whichever flavor you pick.

Authority: O.R.C. §718.01(C)(3), (C)(14)(b)-(c), (R)(2)(c), (YY); O.R.C. §718.03(A); O.R.C. §718.04(A); O.R.C. §715.72(F)(5)(b); O.R.C. §715.691; RITA Individual FAQ, non-taxable income list

The school district tax is the real local cost

The local tax that can reach a conversion is the one aggregator tables skip: the school district income tax of R.C. Chapter 5748, levied by 214 districts for 2026 per the Department of Taxation’s official rate list (dated December 30, 2025, effective January 1, 2026) and collected by the state on the SD 100 alongside the IT 1040. Whether it touches a conversion depends entirely on which of two tax bases the district’s voters enacted (R.C. §5748.01(E)(1)). The traditional base — 146 districts — is Ohio modified adjusted gross income less exemptions, the same base as the state income tax, so a Roth conversion is fully visible. The earned-income base — 68 districts — counts only wages and net self-employment earnings; the Department states flatly that earned income “does not include items such as retirement income, interest, dividends and capital gains.” A conversion is invisible there, at any size.

The top 2026 rate is 2.00%, held by seven districts — and the base split runs straight through them:

Authority: ODT School District Income Tax Rate List, tax year 2026 (dated 12/30/2025, effective 1/1/2026); O.R.C. §5748.01(E)(1); ODT Income — School District Tax FAQ

Covington and Milton-Union are both Miami County districts at the same 2.00%. The same $100,000 conversion costs $2,000 of school district tax on one side of that line and $0 on the other. District boundaries track neither city limits nor ZIP codes; the Department’s address-level lookup, The Finder, returns the district and rate for a specific address, and the SD 100 instructions direct filers to it.

Put the layers together and the organizing claim of this page falls out. The state charges 2.75% wherever you live — $2,750 on that conversion. The local layer runs from $0 (Columbus, whose school district levies no income tax, or any earned-income district) to $2,000 in a 2.00% traditional-base district: totals of $2,750 to $4,750. So the district line is worth up to $2,000 on a single conversion — while the two state rate cuts that produced the new flat tax were worth $750 combined on the same $100,000 (from 3.5% in TY2024, through 3.125% in TY2025, to 2.75% now: $3,500 down to $2,750). Of the eight states covered so far, Ohio is the first where the local layer decides more than the legislature does.

Four mechanics complete the picture. There is no age relief on the traditional base — the Department’s FAQ is explicit that “any individual (including retirees, students, minors, etc.)” who receives income while resident in a taxing district owes the tax, and the SD 100 carries no retirement income credit. The one credit it does carry is a $50 senior citizen credit per return, per district, at 65 or older — with no income limit (R.C. §5748.06), a pointed contrast with the state credits’ $100,000 gate covered below; the instructions add that you qualify for it even if you were ineligible for the equivalent credit on the IT 1040. School district tax paid is not creditable against the state income tax. And the tax follows residence on the date of receipt: under R.C. §5748.01(G), income is a district’s to tax only if received “while a resident,” so a conversion executed while living in a 0% or earned-income district is allocated there even if you move into a traditional-base district later the same year — and vice versa. Estimated payments for both the state and school district taxes run through the same OUPC voucher, with the same IT/SD 2210 interest penalty for underpayment.

Authority: O.R.C. §5748.01(E)(1), (E)(2), (G); O.R.C. §5748.06; ODT Income — School District Tax FAQ; 2025 SD 100 and instructions; ODT SDIT rate list, tax year 2026

Choosing Roth costs money going in

Everything above is about money coming out. Going in, the three layers price the pre-tax-versus-Roth choice differently — and only one of them is neutral.

The state layer is the familiar timing trade, priced at 2.75%. Ohio starts from federal adjusted gross income and R.C. §5747.01 contains no addition or deduction touching elective deferrals in either direction, so the federal treatment flows through: a pre-tax 401(k) deferral never enters Ohio income, while a designated Roth deferral is taxed in the contribution year. On the full 2026 elective-deferral limit of $24,500, choosing Roth costs $673.75 of Ohio tax that the pre-tax choice avoids, for any filer whose taxable income is already above the $26,050 zero band. The school district layer mirrors the state on both bases: the traditional base is MAGI-derived, and the earned-income base counts wages only “to the extent included in modified adjusted gross income” (R.C. §5748.01(E)(2)) — the SD 100 itself asks for wages as reported on the federal return, which exclude pre-tax deferrals and include Roth deferrals. So the suspicion that an earned-income district is harsher on pre-tax savers is wrong; on this choice the two bases behave identically. At the top 2.00% rate a full Roth deferral bears up to $490 of school district tax; at a typical 1.00%, $245. Only the municipal layer is genuinely neutral, taxing $612.50 out of $24,500 at Columbus’s 2.5% either way.

Worst case, a full-Roth chooser in a 2.00% traditional-base district pays $1,163.75 a year of state and local tax that the pre-tax chooser defers. That is a price, not a verdict: Ohio will tax those deferred pre-tax dollars on the way out at whatever rate then prevails — only Social Security, railroad benefits and military retired pay are deductible, not pensions or IRA withdrawals — while qualified Roth withdrawals never enter the Ohio base. The municipal layer is the odd one out in kind, not just in sign: it taxes the deferral once, going in, either way, and exempts every retirement payout coming out.

The same flow-through prices the IRA choice. A deductible traditional IRA contribution reduces federal adjusted gross income, so it cuts Ohio tax by 2.75% — $206.25 on a full $7,500 contribution — and cuts traditional-base school district tax by the district rate ($75 at 1.00%); a Roth IRA contribution gets no Ohio deduction. Two wrinkles: the municipal layer ignores the choice entirely, because an IRA deduction is an above-the-line federal deduction, not a wage exclusion, and municipalities tax qualifying wages; and in an earned-income-base district the IRA deduction generally does not help either, because the base is wages and self-employment income, not MAGI. Whether the traditional contribution is deductible at all is federal law — the workplace-plan phase-outs — and Ohio simply inherits the federal result.

Authority: O.R.C. §5747.01(A); O.R.C. §5747.02(A); O.R.C. §718.01(R)(2)(c), (C)(3); O.R.C. §5748.01(E)(1)-(2); 2025 SD 100 lines 29–33; ODT Income — Retirement Income FAQ #3

The two cliffs and the forfeiture trap

Ohio hangs two benefits on hard income lines, and conversion income counts toward both. Neither is a phase-out. Both are cliffs: one dollar over forfeits everything, and $99,999 keeps everything.

The lower line is property tax. The senior and disabled homestead exemption removes $29,000 of a home’s market value from taxation for tax year 2026 (up from $28,000 for TY2025; the figure is indexed annually), which is worth roughly $400–$700 a year at typical Ohio effective rates — about $435 at a 1.5% effective rate, more than $700 in high-millage Cuyahoga and Franklin county suburbs. Those are computed figures from the exemption amount and local rates, not published ones. The means test is combined Ohio MAGI of owner and spouse at or below $41,000 for the 2026 application period (up from $40,000 for TY2025), measured on the prior year’s income. Social Security never counts — it is deducted before Ohio AGI exists — but a Roth conversion counts dollar-for-dollar, and the test is binary: $1 over the line forfeits the entire exemption for that tax year.

The timing is the part worth writing down. The application for tax year N is filed by December 31 of year N and tested against year N−1 income (R.C. §§323.151, 323.153) — so a 2026 conversion over the line poisons the tax year 2027 exemption, and the loss surfaces in the bill payable in 2028, because Ohio property tax pays in arrears. It is one year at a time: when income drops back under the indexed threshold, the owner requalifies for the next tax year. Two cohorts are immune entirely. The enhanced exemption for 100%-disabled veterans and surviving spouses of fallen emergency responders — $58,000 of market value for TY2026 — carries no income test at all, so no conversion of any size can trip it. And anyone who received the exemption for tax year 2013, before means-testing was reinstated, is permanently exempt from the income test, a status that follows them to a new Ohio home.

The trap inside the trap: there is no annual reapplication — an approved application continues automatically — but R.C. §323.153 imposes a duty to notify the county auditor in any year you do not qualify. Keeping silent through a conversion year converts a one-year loss into a clawback of every improperly received year’s reduction, with interest exposure, once the auditor checks income against Department of Taxation records.

The higher line is income tax. All four of Ohio’s retirement and senior credits require modified adjusted gross income less exemptions under $100,000 (R.C. §5747.055): the retirement income credit (up to $200 per return, the full amount reached above $8,000 of retirement income), the $50 senior citizen credit (65 or older by year-end — turning 65 in December qualifies for the full year), and both one-time lump-sum credits. Because a conversion raises Ohio MAGI dollar-for-dollar, a large one does not merely fail to earn the credits — it forfeits them for all other retirement income that year: a 65-plus couple with pension income loses $250. Two refinements on the retirement income credit itself. The Department’s FAQ holds that pre-retirement draws are not received “on account of retirement,” so a working-age conversion cannot claim it in any case; and whether a conversion executed after retirement qualifies is not addressed in any published guidance — we searched the FAQ, the instruction booklet and the statute, and it is unanswered either way. The joint filing credit survives $100,000 — its percentage merely bottoms out at 5% above $75,000 of MAGI less exemptions, at most $650 — but for taxable years beginning in 2026, HB 96 (the 2025 budget act) eliminates both personal exemptions and the joint filing credit at $500,000 of MAGI, a new and final cliff for very large conversions.

One credit survives all of this: the school district $50 senior citizen credit has no income cap, so it outlives the $100,000 gate — and the Department confirms that claiming the lump-sum credit does not affect it. On a state return, the cliffs are small in dollars and hard at the edges; on a property tax bill, the homestead cliff is the one that costs real money.

Authority: O.R.C. §§323.151, 323.152(A)(1)-(2), 323.153; LSC Bill Analysis S.B. 92 (Feb 2025); county auditor homestead pages (Lake, Stark, Butler); O.R.C. §5747.055(B)-(G); O.R.C. §5747.025 and §5747.05(E) as amended by HB 96; 2025 IT 1040 instructions, Schedule of Credits lines 2–5; ODT Income — Retirement Income FAQ; O.R.C. §5748.06

Leaving Ohio: the one exit with a mechanical answer

Of the eight states covered so far in this series, Ohio is the only one that hands a departing taxpayer a mechanical safe harbor. New York decides residency by facts-and-circumstances audit, with the taxpayer proving everything; Ohio wrote the answer into statute. Under O.R.C. §5747.24(B), an individual who files an annual statement and meets all five criteria is irrebuttably presumed not domiciled in Ohio for the entire year: no more than 212 contact periods in Ohio; at least one abode outside Ohio for the entire year on which no federal §167 depreciation was claimed (not a vacation home or rental, per the Department of Taxation); no valid Ohio driver's license or state ID at any time during the year; no Ohio homestead or owner-occupancy property-tax reduction; and no in-state tuition based on an Ohio abode. Meet all five and file on time, and an auditor cannot reweigh intent — the only available attack is whether the five sworn facts were true.

The statement is form IT NRS — or, equivalently, a checkbox on page 1 of the IT 1040 or the IT 10 — due by the fifteenth day of the tenth month after the taxable year closes, October 15 for calendar-year filers. It covers only the year filed for and must be renewed annually. Spouses may file jointly or separately, but each must independently satisfy all five criteria; residents and part-year residents cannot use the checkbox at all.

Authority: O.R.C. §5747.24(B)(1)-(2); 2024 IT 1040 instruction booklet, IT NRS instructions; ODT FAQ "Income — Ohio Residency and Residency Credits"

"Contact period" is the unit snowbirds get wrong, and it is not a day. You have one contact period when you are away overnight from your out-of-state abode and spend "at least some portion, however minimal," of each of two consecutive days in Ohio. You need not sleep in Ohio: the Department's own example counts portions of Monday and Tuesday spent in Ohio, with Monday night in a Kentucky hotel, as one contact period. Non-consecutive days count zero — portions of Monday and Wednesday, with Tuesday elsewhere, produce no contact period at all. The arithmetic is generous: a Florida snowbird's four-month Ohio summer runs to roughly 120 contact periods, comfortably under the threshold — which is why departures that fail the harbor usually fail on the license, the property-tax reduction or the depreciated abode, not the count.

The statute has been rebuilt twice, and older commentary still circulates each superseded version. As enacted in 2007 (HB 73) the threshold was 182 contact periods; HB 494 raised it to 212 effective 2015, when the test still had only two other criteria; and HB 292 (2018) added the license, property-tax-reduction and tuition criteria after the Ohio Supreme Court's decision in Cunningham v. Testa punctured the reliability of the old affidavit.

What breaks the harbor is a false statement — and it breaks hard. A statement false as to any of the five requirements does not merely downgrade the presumption to rebuttable; it flips the filer into §5747.24(C) or (D)'s presumption of Ohio domicile for the entire year, and knowingly making a false statement is perjury under R.C. 2921.11. If the tax commissioner challenges the contact-period count, the individual bears the burden of proving it by a preponderance and is presumed to have a contact period for any period not affirmatively disproven — contemporaneous travel records matter even under a mechanical test.

Authority: O.R.C. §5747.24(A), (B)(3), (E); R.C. 2921.11; HB 73 (2007); HB 494 (130th G.A., eff. 2015); HB 292 (132nd G.A., eff. 2018); Cunningham v. Testa, 2015-Ohio-2744; ODT residency FAQ Q10

The catch sits in division (B)(4): the safe harbor is unavailable in the year you actually move. The presumption is a full-year device, and (B)(4) excludes anyone whose domicile changes during the taxable year — so the year that matters most is decided under ordinary common-law domicile principles, with the taxpayer proving the change by a preponderance. What rescues the move year is Ohio's allocation rule. A part-year resident reports full federal AGI, then backs out the non-Ohio portion through the nonresident credit computed on form IT NRC, whose line 11 assigns pensions, annuities and IRA distributions to Ohio only if "paid or accrued while you were an Ohio resident" (R.C. 5747.20(B)(6)). There is no day-count proration: a conversion is Ohio income or it is not, by residency on the distribution date. Convert the week before the moving truck leaves and the whole amount is Ohio's; convert the week after — even in December of the same year — and none of it is, provided the domicile change itself holds up. Full-year nonresidents do not report these items at all — they "have no impact on the calculation of your nonresident credit," the Department's FAQ confirms.

So the Ohio-to-Florida sequence has three rungs. A conversion in the final full Ohio year is fully taxable — 2.75% for 2026, plus school-district tax on the traditional base. A conversion in the move year dated after the domicile change escapes the Ohio column of the IT NRC, but rests on facts and circumstances. A conversion in the first full Florida year, with the IT NRS filed and the five criteria met, is the only one whose Ohio answer is mechanical: $0, twice over. Ohio's sourcing statute allocates a nonresident's retirement-plan income away from Ohio unless the owner was Ohio-domiciled when it was paid, and federal law independently forbids the tax: 4 U.S.C. §114 bars any state from taxing the retirement income of a nonresident non-domiciliary, reaches IRAs through §114(b)(1)(E) and IRC §7701(a)(37), and reaches Roth conversions because IRC §408A(a) treats a Roth IRA as an individual retirement plan. Ohio's own FAQ concedes the point: "A state can only tax the retirement income of a resident taxpayer." On a $100,000 conversion, the gap between the first rung and the third is $2,750 to $4,750.

One rule that does not help: wage reciprocity. Ohio's agreements with Indiana, Kentucky, Michigan, Pennsylvania and West Virginia cover compensation only — the instructions exclude business income, gambling winnings, rental income, capital gains and everything else — so they do nothing for a conversion or any other retirement income. A Pennsylvania resident's conversion is safe from Ohio because of nonresidence, not reciprocity.

Authority: O.R.C. §5747.24(B)(4); R.C. 5747.20(B)(6), (C); 2024 IT NRC instructions, line 11; ODT FAQ "Income — Retirement Income" Q5, Q19; 4 U.S.C. §114(a), (b)(1)(E); IRC §7701(a)(37), §408A(a); R.C. 5747.01(A)(33), 5747.05(A)(2)

And there is an intra-state version no aggregator covers: moving across a school-district line is itself a tax event. School-district income is the portion of taxable income "received by the individual during the portion of the taxable year that the individual is a resident of the school district" (R.C. 5748.01(G)), and the SD 100's schedules allocate by exact matching — if you know which district you lived in when an amount arrived, you assign it there; the day-count residency factor is only the fallback. A dated 1099-R pins a conversion precisely. A conversion executed while resident in an earned-income-base or no-tax district is therefore allocated there and escapes school-district tax even if you move into a 2.00% traditional-base district later the same year — and, run the other way, crossing the district line before converting can add $2,000 per $100,000. A move out of Ohio uses district 9999 on the SD 100's residency schedule for the nonresident period.

Authority: R.C. 5748.01(E)(1)-(2), (F), (G) (as renumbered eff. 1/1/2026); 2025 SD 100, line 22 and multi-district schedules; ODT FAQ "Income — School District"

Creditor protection: inherited IRAs shielded by name

Ohio's exemption statute does something most states' statutes do not: it names the accounts. O.R.C. §2329.66(A)(10)(c) exempts a person's rights in "any individual retirement account, individual retirement annuity, 'Roth IRA'" — the Roth in quotation marks in the statute itself — from execution, garnishment, attachment or sale to satisfy a judgment, with no dollar cap and no support test. The "reasonably necessary for support" standard that hollows out some states' exemptions appears in Ohio law only next door, in (A)(10)(b) (non-qualified annuities) and (A)(10)(d) (Keogh plans), never in the IRA provision. Coverage is limit-based instead: contributions within the applicable annual limits, rollover amounts, and all earnings on them — and the rollover cross-references include IRC §408A(c)(3)(B) and §408A(d)(3), so converted balances and Roth rollovers sit squarely inside the exemption.

For inherited accounts Ohio is blunter still. Section 2329.66(A)(10)(e) exempts the same account types "that a decedent, upon or by reason of the decedent's death, directly or indirectly left to or for the benefit of the person" — by will, trust, beneficiary designation, payable-on-death designation "or any other method or procedure." The provision took effect March 27, 2013 (H.B. 479, 129th General Assembly, with companion S.B. 343 amending the same section the same day) — roughly fifteen months before the U.S. Supreme Court held in Clark v. Rameker that an inherited IRA is not "retirement funds" under the federal exemption. The decision that stripped inherited IRAs of federal bankruptcy protection nationwide never touched Ohio debtors, who claim the state exemption instead.

The statute was closing a documented gap. In In re Kuchta, 434 B.R. 837 (Bankr. N.D. Ohio 2010), a debtor who had inherited her mother's IRA claimed it exempt; the court disallowed the state exemption — the then-current (A)(10)(c) covered only the owner's own retirement saving — and allowed the federal one. Both halves were later overtaken: Clark abrogated the federal holding, and (A)(10)(e) gives today's Ohio beneficiary exactly the state exemption Kuchta's debtor lacked. One honest caveat: we located no published Ohio decision applying (A)(10)(e) to an inherited IRA after Clark — the text is unambiguous, but the point is untested in a published opinion.

The carve-outs are narrow. (A)(10)(c) opens with two: assets "deposited for the purpose of evading the payment of any debt," and child- and spousal-support enforcement under the enumerated withholding statutes. There is no time-based contribution lookback; a good-faith savings clause in (A)(10)(g) preserves the exemption where a plan failed an Internal Revenue Code criterion "due to an error made in good faith"; and fraudulent-transfer law applies generally. Ohio opted out of the federal exemption list in 1979 (§2329.662), so its debtors use the state list — but the federal retirement-funds exemption in 11 U.S.C. §522(b)(3)(C) sits outside the opted-out list and remains available on top, subject to the federal $1,711,975 aggregate cap for cases filed through March 31, 2028. The Ohio exemption meets no cap at all. One divorce wrinkle: (A)(10)(f) extends all of these exemptions to an alternate payee under a QDRO "or other similar court order," so a divided IRA keeps its exempt status in the recipient spouse's hands.

One doctrinal contrast matters for readers arriving from our Georgia guide. Georgia's protection is an exclusion: in In re Hoffman (11th Cir. 2022) a Georgia debtor's Roth IRA never became property of the bankruptcy estate at all, because 11 U.S.C. §541(c)(2) enforces the transfer restriction in Georgia's garnishment statute — a holding that rests on Georgia law and travels nowhere. Ohio's protection is an exemption: Kuchta applied the Sixth Circuit's §541(c)(2) test and held the IRA is property of the estate — "an IRA is not a spendthrift trust," as the trustee put it — and the Ohio debtor then exempts it out under §2329.66. Same destination, different machinery: an exclusion never meets a cap or a carve-out, while an exemption is only as strong as its statute — and Ohio's is strong.

Authority: O.R.C. §2329.66(A)(10)(b)-(g); §2329.662; In re Kuchta, 434 B.R. 837 (Bankr. N.D. Ohio 2010); Clark v. Rameker, 573 U.S. 122 (2014); In re Hoffman, 22 F.4th 1341 (11th Cir. 2022) (Georgia law); 11 U.S.C. §522(b)(3)(C), (n); §541(c)(2) (the exclusion route, Georgia only)

Ohio's public workforce is outside Social Security

OPERS puts it in one sentence: "As a member of OPERS you do not pay into Social Security." The same structure covers teachers (STRS) and school employees (SERS) — Ohio's public workforce is almost entirely outside Social Security, one of the largest non-covered workforces in the country at roughly a million current and former workers, contributing 10% of salary to the pension instead of 6.2% FICA (12% public safety, 13% law enforcement). The Roth consequence is structural: these workers accrue no Social Security on public wages, their defined-benefit pensions have no Roth feature, and their tax-free-in-retirement options come down to a Roth IRA — subject to the federal income limits — and the state deferred-compensation plan's Roth 457.

A 2025 federal law rewrote the planning baseline. The Social Security Fairness Act (P.L. 118-273, signed January 5, 2025) repealed both the Windfall Elimination Provision and the Government Pension Offset, effective for benefits payable for months after December 2023. For mixed-career Ohio retirees — an OPERS pension plus a side Social Security record, or a spouse's — the decades of planning content built around the WEP haircut are simply obsolete: benefits now arrive unreduced. The unreduced benefit raises the taxable-income floor these workers carry into retirement, which changes the arithmetic of every low-income-gap-year conversion calculation written before 2025.

The statewide supplemental plan, Ohio Deferred Compensation, has accepted Roth 457 contributions since early 2020, and the option has no income limits — the door the Roth IRA's MAGI phase-out closes stays open here. Roth 457 accounts carry no lifetime RMDs, can roll to a Roth IRA, and reach qualified status five tax years after the first Roth contribution plus age 59½, death or disability. Two gates, though. The plan does not permit in-plan conversions, as of its most recent published Roth guide (November 2023). And the option is not automatic: each public employer must execute an Employer Adoption Agreement before its employees can make Roth contributions — whether a Roth 457 exists for you depends on whether your employer signed. Separately, federal law now force-feeds the option to higher earners: from 2026, age-50 catch-up contributions must be Roth for participants whose prior-year wages from the same employer exceeded $145,000 (indexed).

Two corners of the system have no Roth path at all. OPERS' Member-Directed plan — the defined-contribution alternative — describes no Roth or after-tax choice in its plan materials, and as a §401(a) plan with mandatory picked-up contributions it cannot accept designated Roth contributions in any case. The same logic covers the university Alternative Retirement Plan, with mandatory pre-tax contributions of 14% for faculty and 10% for staff at Ohio State. Participants in either who want Roth dollars go outside the plan: the Roth 457, where adopted, or a Roth IRA.

Authority: O.R.C. Chapters 145, 3307, 3309; Social Security Act §218; P.L. 118-273 §§2-3; O.R.C. Chapter 148; Ohio DC 2023 ACFR (Auditor of State); Ohio DC Roth 457 employer guidance; SECURE 2.0 §603 / IRC §414(v)(7); O.R.C. Chapter 3305; IRC §402A

What Ohio does not tax

Qualified Roth withdrawals never enter the Ohio return. Ohio adjusted gross income is federal adjusted gross income plus or minus an enumerated list of adjustments, and nothing on the list touches a Roth distribution — the 2025 Schedule of Adjustments instructions contain the word "Roth" zero times. A qualified distribution is excluded from federal AGI, so it never reaches Ohio's starting line. The Department of Taxation states the whole rule in a single FAQ answer, and it is the cleanest statement of conversion taxability any state tax agency in this series has produced so far: "Ohio only taxes retirement income included in federal adjusted gross income. If your rollover did not result in you recognizing income on your federal return, it will not be taxable to Ohio. However, if your rollover results in recognizing income that is included in your federal adjusted gross income (e.g. converting to a Roth IRA), it will be taxable to Ohio." A nonqualified Roth withdrawal is taxed only on the earnings portion that lands in federal AGI — returned contributions pass untouched. The conformity covers beneficiaries too: a qualified distribution from an inherited Roth is free of Ohio income tax, and exempt at the municipal layer as well, since the uniform city-tax base exempts retirement payments made "to the beneficiary of an employee" by name.

The second exemption does quiet, underappreciated work in conversion math. Ohio deducts 100% of federally taxed Social Security, and that kills the state half of the "tax torpedo." Federally, a conversion can drag more of your Social Security into taxation — up to 85% of benefits — so each converted dollar is taxed once directly and again through the newly taxable benefits, which is why the federal marginal rate on a mid-size conversion can spike well above the bracket rate. None of that propagates to Columbus. The extra taxable Social Security lands in federal AGI and is then deducted in full on the Ohio Schedule of Adjustments (the line simply copies federal Form 1040 line 6b), so Ohio's cost of the conversion is 2.75% of the conversion amount alone. The deduction holds at the school-district layer too: the traditional SDIT base is built on Ohio MAGI, which is Ohio AGI plus only the business income deduction add-back, so deducted Social Security never re-enters anywhere downstream.

There is also no state early-withdrawal penalty. Chapter 5747 contains no counterpart to the federal 10% additional tax — nothing on the IT 1040 imports federal Form 5329 amounts — so an early nonqualified withdrawal owes Ohio only ordinary tax on the earnings that reach federal AGI. The one indirect sting: the Department treats early distributions as not received "on account of retirement," so they cannot claim even the small retirement income credit.

Death taxes are simpler still. Ohio's estate tax was repealed for deaths on or after January 1, 2013 (H.B. 153, the 129th General Assembly's 2011 budget act), and a 2021 sunset closed out even legacy administration: no Ohio estate tax is due for property first discovered after December 31, 2021, even where the death predated the repeal. There is no inheritance tax and never was — the old levy was an estate tax, not a beneficiary-class tax — and the Department no longer even processes the old "inheritance tax waiver" release forms. No gift tax appears anywhere in the Revised Code. What remains is federal: a Roth balance is includible in the federal gross estate under IRC §2039 — estate-tax inclusion and income-tax exemption are independent questions — against the 2026 basic exclusion of $15,000,000, with spousal portability elected on a timely Form 706.

Authority: O.R.C. §5747.01(A), (A)(5); IRC §408A(d)(1); ODT Income — Retirement Income FAQ; 2025 IT 1040 Schedule of Adjustments line 16; O.R.C. §718.01(C)(3); O.R.C. ch. 5747 (no penalty provision; contrast IRC §72(t)); H.B. 153 (129th G.A., 2011); H.B. 110 (134th G.A., 2021); ODT Estate Tax FAQ (May 15, 2020); IRC §2039; Instructions for Form 706 (09/2025), Schedule I; Rev. Proc. 2025-32

529s, and the Medicaid rule that answers the Roth question by name

Ohio's 529 deduction is $4,000 per beneficiary per year (combined for spouses), with no cap on the number of beneficiaries and an unusually generous feature: excess contributions carry forward without limit, deductible in future years until fully used. It applies only to Ohio's own plan, CollegeAdvantage, and is claimed on the Schedule of Adjustments. A bill that would raise the limit has passed the House but is not law.

The Roth-relevant question is what happens to those old deductions when a seasoned 529 is rolled into the beneficiary's Roth IRA under SECURE 2.0. Ohio's answer is published and favorable: the official CollegeAdvantage Offering Statement, issued on behalf of the state, states that "A Roth IRA Rollover will not be subject to recapture of previous deductions in computing Ohio state income tax," and the same document carves the rollover's earnings out of state taxation. The contrast is the content: rolling the same account to another state's 529 plan does trigger recapture of every previously deducted dollar. Ohio 529 to Roth IRA, no recapture; Ohio 529 to an out-of-state 529, recapture in full. One honesty note: the Department of Taxation itself has issued no ruling, and the recapture statute predates SECURE 2.0, so the plan's disclosure document is the controlling published guidance rather than a statute. The federal conditions apply unchanged — fifteen years of account age, the $35,000 lifetime cap, the annual Roth IRA limit, and the five-year contribution lookback.

Medicaid long-term-care eligibility is where Ohio's drafting is genuinely unusual. The aged-blind-disabled rule treats a retirement fund as a countable resource when the owner or spouse can convert it to cash and "is not legally able to receive regular, periodic payments from the fund"; a fund in payout status is instead treated as a source of unearned income. The countable value is what is currently withdrawable net of any early-withdrawal penalty — but not reduced for the income tax a withdrawal would trigger. And where Georgia's manual leaves a Roth stranded (its test turns on payments of principal, which nothing forces from a Roth), Ohio's rule answers the Roth question by name: "When a retirement fund does not require RMDs, such as with a Roth IRA, the individual must take regular, periodic payments from the individual's retirement account in order for the funds to be considered unearned income." The payments must be uniform in amount and interval, but no amount is mandated and the owner may choose any calculation method — and uniform periodic payments from a no-RMD fund are deemed the maximum available, regardless of size. Ohio hands the Roth an explicit route into payout status that Georgia's test denies it.

Three mechanics follow. The periodic payments themselves are budgeted as unearned income, so payout status is a trade, not an escape. A lump-sum cashout is the wrong move twice over: it is unearned income in the month received and a countable resource the month after, and where a choice between periodic payments and a lump sum exists, the rule requires choosing periodic payments. And a spouse's retirement fund runs through the same test — the rule is written disjunctively over "the individual or the individual's spouse" — though a fund owned by an ineligible spouse is excluded from deeming in community-based cases, and the institutional spousal-impoverishment assessment runs under separate rules.

Estate recovery is the after-death half, and Ohio's reach is wide. The recoverable estate is not limited to probate: by statute it includes assets in which the decedent held any interest at death, "including assets conveyed to a survivor, heir, or assign of the individual through joint tenancy, tenancy in common, survivorship, life estate, living trust, or other arrangement." A Roth IRA passing by beneficiary designation is an asset the decedent held at death, conveyed through exactly such an arrangement — so on the statute's text, naming a beneficiary does not move the account beyond recovery's reach. We found no Ohio case or Medicaid rule applying the clause to an IRA specifically, so treat that as the unambiguous statutory reading rather than a litigated result. Recovery runs against benefits correctly paid for recipients 55 or older, or permanently institutionalized.

Authority: O.R.C. §5747.70(A), (D)(1); 2025 IT 1040 Schedule of Adjustments line 37; H.B. 48 (136th G.A., passed House only); CollegeAdvantage Direct Plan Offering Statement (OTTA, eff. 5/18/2026), "Treatment of Roth IRA Rollovers"; IRC §529(c)(3)(E) (SECURE 2.0 §126); OAC 5160:1-3-03.10(B)(3), (C), (D) (eff. 3/1/2026); OAC 5160:1-3-05.8; Georgia DFCS Medicaid Policy Manual §2332 (contrast); O.R.C. §5162.21(A)(1)(b)

Ohio against the other seven states in this series

The comparison makes Ohio's position legible. Its 2.75% is the lowest 2026 conversion rate of the income-tax states covered so far, and it is the only one of the eight states covered so far where the local answer splits — the city can never reach the conversion, while the school district across the street may take up to another 2%. Its inherited-IRA protection is the strongest statutory posture in the group: an express exemption naming inherited accounts, rather than a favorable court holding. And it is alone in offering a mechanical, criteria-based way to prove you left. What it lacks is any age-based exclusion — a 70-year-old converting in Ohio pays the same 2.75% as a 30-year-old, where Georgia might charge the 70-year-old nothing.

Traps

Debunked

The dataset

Every figure on this page comes from a dataset of 89 facts, each carrying its statutory or administrative authority, a verbatim quote from the source, a confidence grade and an independent verification verdict. Of the 88 researched facts, 83 were confirmed on re-verification against primary sources and 5 were corrected before publication; none were left unverifiable. One further fact — the locality comparison that organizes this page — is derived arithmetic on verified cells, and its audit trail (including a pre-publication correction to our own math) ships in the data.

The workbook carries seven sheets, including three live calculators — what a conversion costs at your address with your school district’s rate applied, whether to convert before or after leaving Ohio, and a dedicated cliff checker that tests a planned conversion against the $41,000 homestead line and the $100,000 credit gate at once. The CSV is one row per fact, with authority, source quote, confidence grade and verification verdict.

This page is educational and is not tax or investment advice. School district rates change annually and the TY2026 form instructions were not yet published at verification; verify current figures against the Ohio Department of Taxation and your county auditor before acting. Rate verified as of 2026-08-02.