The Roth IRA in Ohio

Thinking about moving retirement savings into a Roth IRA? In Ohio, start with three different questions: what enters your state income, what your school district taxes, and which income tests may change. A city-tax check belongs on the list too. One percentage cannot answer all of them.

A conversion means moving money from a Traditional IRA into a Roth IRA. The federally taxable part generally enters Ohio income. A later qualified Roth withdrawal is different: it is excluded from federal income and Ohio’s ordinary income starting point. Money you converted and money you must include in income are not necessarily the same amount. IRS Publication 590-A and Ohio’s income definition explain that distinction.

Ohio Roth report card

These summaries apply to the situations explained below. Unknown personal facts are not a finding of zero tax or guaranteed protection.

What Ohio’s 2.75% rate actually means

For a resident individual’s 2026 nonbusiness-income calculation, Ohio starts with Ohio adjusted gross income, subtracts taxable business income and applicable personal exemptions, then applies this schedule. That resulting amount is the tax-table base; it is not your account balance or gross conversion.

The fixed $332 matters when you cross the zero-tax band. Once both the before-and-after bases are above it, each additional dollar of that base adds 2.75 cents under this schedule. Changes in exemptions, credits or other income can still change the final return. R.C. 5747.02(A)(3)(c) gives the formula; the enacted H.B. 96 analysis confirms that bracket and personal-exemption indexing is suspended for 2025 and 2026—not forever.

Ohio’s business-income deduction is a different rule. It does not turn an IRA conversion into business income or put it on the 3% business-income track. The federally taxable conversion portion is the starting point, with any applicable Ohio adjustments. R.C. 5747.01 and R.C. 5747.20(B)(6) distinguish these categories.

City tax: an important exception to the usual rule

Under Ohio’s ordinary municipal-tax rules, pension and retirement-benefit payments are exempt income. But “no Ohio city can tax a conversion” is too broad.

The statute has a separate rule for a qualified municipal corporation: a municipality with the specified pre-December 31, 2011 Ohio-AGI-based ordinance. Its resident income calculation uses Ohio AGI with the municipality’s own exemptions and excluded deductions. If that category applies, check the current local rules before assuming the conversion is excluded. R.C. 718.01(A)(1)(b), (C)(3) and (RR) sets out both regimes.

The workbook does not calculate either municipality’s return. A zero district input is not proof that your address has no local tax.

Your school district has its own income base

A school-district income tax is separate from city tax. Two districts can charge the same percentage and still tax different income.

The traditional base is Ohio modified adjusted gross income (MAGI) less applicable exemptions. The earned-income base uses wages and net self-employment income to the extent included in MAGI. Neither is simply “gross dollars converted.” R.C. 5748.01(E) defines them; the official 2026 rate list identifies each district’s choice.

That list reports 214 taxing districts, including 68 earned-income districts: 214 − 68 = 146 traditional-base districts. Those are dated 2026 counts, not a permanent statewide rule. Use Ohio’s The Finder for the actual address, then confirm the district, base, rate and period of residence. A ZIP code or city name is not the whole answer.

District income is tied to income received while resident and while the district tax is in effect; moving can require more than one district allocation. A separate senior district credit is up to $50 per return for a taxpayer age 65 or older during the year, limited to tax otherwise due; its statute does not use the state retirement-credit $100,000 ceiling. R.C. 5748.01(F)–(G) and R.C. 5748.06 explain those rules.

Contributing and converting are different decisions

A designated Roth salary deferral to a workplace plan is included in federal income now; an eligible pre-tax salary deferral generally is not. That difference flows through Ohio’s starting point. In the ordinary municipal wage calculation, specified pre-tax deferrals are added back, so a federal deduction need not reduce city taxable wages. Qualified municipalities need their separate local review. IRS Publication 575 and R.C. 718.01(R)(2)(c) provide the framework.

An IRA contribution is a separate transaction. A deductible Traditional IRA contribution can reduce the federal-AGI starting point; a Roth IRA contribution cannot be deducted. Whether the Traditional contribution is deductible depends on federal rules, not just your account’s name. For 2026, the shared ordinary IRA limit is $7,500 under age 50 or $8,600 age 50-plus, subject to compensation and Roth income eligibility. A workplace plan has different limits. Publication 590-A and IRS Notice 2025-67 explain them.

This is why a simple “Roth costs 2.75% more” claim can be misleading. The deduction, income band, local base, credits and later withdrawals all need their own inputs.

Use the right income measure for each test

AGI means adjusted gross income. Ohio starts with federal AGI and makes state adjustments. Ohio MAGI adds back the deductions in R.C. 5747.01(A)(28) and (A)(34). It is not the same measure as federal MAGI for Roth contribution eligibility, or the workbook’s nonbusiness tax-table base. R.C. 5747.01(A) and (II) defines the Ohio measures.

Credits are conditional—not automatic refunds

The annual retirement-income credit is up to $200 per return. It requires qualifying income received on account of retirement and included in Ohio AGI. The state senior credit is up to $50 per return for age 65 or older during the year. The shared income gate is MAGI less exemptions below $100,000; exactly $100,000 fails it. Actual tax liability and credit ordering still matter. Do not automatically count a conversion as eligible retirement income. R.C. 5747.055(A)–(B), (F) supplies the conditions.

The joint-filing credit has a different 2026 ceiling: MAGI below $500,000, not $100,000. Each spouse must also have at least $500 of the specified qualifying income. Its percentage calculation is capped at $650, not guaranteed to save that amount. Personal exemptions also have the separate $500,000 eligibility boundary and income tiers. R.C. 5747.05(E) and R.C. 5747.025 control the exact boundaries.

Certain lump-sum credit elections can foreclose specified future annual credits. An entire IRA conversion is not automatically a qualifying lump-sum claim. Get the election and income qualification checked before relying on it. R.C. 5747.055(C), (E) and (G) distinguishes those choices.

Homestead: keep income year, tax year and collection year separate

For the ordinary means-tested category, a conversion can raise the owner-plus-spouse prior-year income used for homestead relief. Grandfathered recipients and qualifying enhanced veteran categories have different rules. The reduction is not a fixed cash payment.

Notice the different rows: the $29,000 and $58,000 figures are not labeled as real-property tax year 2026 in that entry. And a conversion in 2026 needs the income rule for the later applicable homestead year—not an automatic reuse of the $41,000 gate. The actual commissioner’s entry, income and eligibility definitions, and current reduction statute are the relevant references.

Some prior recipients and qualifying surviving spouses are exempt from the standard income test. Enhanced veteran eligibility includes qualifying total-disability or individual-unemployability ratings; it is not an automatic benefit for every veteran. Applications can continue while eligible, but changes must be reported and improper reductions can be recovered. Ask the county auditor about the applicable year and category, not just “this year’s limit.” R.C. 323.153 explains continuing applications and reporting.

Plan for payments separately from the conversion

A conversion can increase the amount you need to pay during the year. Ohio’s estimated-tax rules generally compare scheduled payments with 90% of current-year tax or 100% of prior-year tax, with the prior-year test requiring a filed 12-month return. The statutory calendar-year installment dates are April 15, June 15, September 15 and January 15 of the following year, subject to applicable due-date rules. A year-end total alone does not prove every installment was timely. R.C. 5747.09 includes the $500 estimate threshold and annualization/reasonable-cause provisions.

Ohio retirement-benefit withholding can be requested, but check the provider’s actual procedure and timing. The statute describes an application and withholding beginning in the following calendar year; do not assume a same-year IRA conversion will automatically have enough Ohio tax withheld. Federal withholding is a different calculation. R.C. 5747.071 explains the Ohio request.

Moving: a change of address is not the whole tax answer

Ohio allocates covered nonbusiness retirement income by domicile when it is paid or accrued. Federal 4 U.S.C. §114 also limits a source state’s taxation of covered retirement income when you are neither its resident nor its domiciliary. Being physically out of Ohio on conversion day does not establish either fact. R.C. 5747.20(B)(6) and 4 U.S.C. §114 are the starting points.

Ohio’s annual nonresident presumption requires all of the following, plus a timely truthful statement:

• No more than 212 Ohio contact periods.
• A qualifying out-of-state abode throughout the year, without the specified federal depreciation claim.
• No valid Ohio driver’s license or identification card during the year.
• No specified property-tax reduction based on occupying an Ohio abode.
• No specified Ohio-abode-based public-university tuition treatment.

A contact period is not just a day count: the rule involves being away overnight from an out-of-state abode and spending part of two consecutive days in Ohio. The annual statement ordinarily is due October 15 after a calendar year ends, with a separate rule when the individual dies. Most importantly, this annual presumption does not apply in a year your Ohio domicile changes. R.C. 5747.24 sets out the requirements, evidence standards and exception.

For a move-year conversion, keep the actual transaction date and domicile evidence. An annual Form 1099-R does not, by itself, tell you when the conversion happened. State allocation and school-district receipt-period allocation are separate checks. A neighboring-state wage-reciprocity agreement is not an IRA-conversion exemption. The workbook does not recommend converting before or after a move.

Protection: a state exemption is not immunity

Ohio expressly names IRAs and Roth IRAs in its creditor-exemption statute. But the opening rule applies to people domiciled in Ohio, and subsection (A)(10)(c) protects the described annual-limit contributions, listed rollovers and earnings—not any deposit of any size. Debt-evasion deposits and specified support enforcement are exceptions. R.C. 2329.66(A)(10)(c) is the relevant state provision.

Inherited retirement-account rights have their own wording in subsection (A)(10)(e). The U.S. Supreme Court’s Clark v. Rameker, 573 U.S. 122 (2014), held that the inherited IRA at issue was not “retirement funds” for the federal bankruptcy exemption. That did not erase every state exemption or every possible protection. Conversely, Ohio’s inherited-account provision does not mean Clark can never matter to an Ohio debtor. The current Ohio statute and the official Supreme Court opinion answer different questions.

Bankruptcy adds another set of rules

Ohio opts out of the federal §522(d) list, but the separate federal qualified-retirement-funds exemption can still be relevant. Bankruptcy’s applicable-state-law rule generally looks to 730 days of prefiling domicile, with a specified preceding 180-day selection when needed. Recently moving to Ohio does not automatically make Ohio exemption law govern. R.C. 2329.662 and 11 U.S.C. §522(b)(3) explain the distinction.

For cases filed April 1, 2025 through March 31, 2028, the adjusted federal §522(n) IRA/Roth cap is $1,711,975, subject to its scope and a possible judicial increase. Its employer-rollover carve-out lists §§402(c), 402(e)(6), 403(a)(4), 403(a)(5) and 403(b)(8), plus attributable earnings. It does not list IRA-to-IRA rollovers under §408(d)(3) or Roth conversions under §408A(e). SEP/SIMPLE treatment differs. This cap is not a universal limit on every state-law exemption or retirement account. See §522(n) and the official court adjustment table.

Also distinguish property excluded from a bankruptcy estate from property exempted after it enters the estate. The historical 2010 Kuchta opinion does not settle every current Ohio account or applicable-law question. A creditor, divorce or bankruptcy dispute needs an attorney’s account- and claim-specific review; a map or report card cannot provide that clearance.

Estate tax is a separate question

Ohio’s estate-tax statute applies to deaths before January 1, 2013. That is not a promise that a Roth has no federal estate consequences or Medicaid recovery exposure. Federal income-tax-free treatment does not itself exclude retirement assets from estate analysis; the federal basic exclusion is $15,000,000 for calendar year 2026. R.C. 5731.02, the July 2026 Form 706 instructions and Rev. Proc. 2025-32 describe the different systems.

For public employees, verify the exact plan

Ohio Deferred Compensation offers a Roth 457 option when the employer has adopted it. Its current guidance requires the employer’s Exhibit B before employees can contribute. That does not establish every employer’s participation or rule out other workplace options. Ask for the current plan documents rather than treating silence in an old brochure as “no Roth available.” Ohio DC’s employer guidance explains the adoption requirement.

For the 2026 Roth catch-up wage test, the relevant threshold is more than $150,000 of 2025 wages from the sponsoring employer, subject to the applicable plan rules. It is not a household-AGI threshold or an ordinary IRA contribution rule. IRS Notice 2025-67 supplies the indexed wage test.

The Social Security Fairness Act ended WEP and GPO for benefits payable January 2024 and later. It did not create Social Security coverage or eligibility for every public employee. Existing pension and Social Security records still matter. SSA’s explanation identifies the effective benefit period.

Qualified withdrawals and Social Security

A qualified Roth IRA withdrawal generally needs the relevant five-tax-year period plus age 59½, death, disability or the limited first-home condition. Returns of regular contribution basis can also be excluded without being qualified distributions. Nonqualified withdrawals and conversion recapture follow different federal rules. IRS Publication 590-B explains why “Roth money” is not one tax category.

After an owner’s death, an inherited Roth’s qualified-distribution treatment still depends on the relevant owner’s five-tax-year period. Ohio starts with what is federally included; it does not make every inherited payout immediately qualified.

Ohio separately deducts the Social Security benefits included in federal AGI. A conversion can still increase federal tax on Social Security or affect other income tests, even though that federal taxable-benefit amount is deducted on the Ohio side. Specified disability/survivor, railroad and military-retirement adjustments have their own conditions. R.C. 5747.01 is not a blanket pension exemption.

Two adjacent topics with different rules

529-to-Roth: do not confuse it with an ordinary conversion

Ohio’s qualifying plan contributions can produce an income deduction of up to $4,000 per beneficiary per year, with carryforward; married filers count as one taxpayer for that rule. It is not a $4,000 tax credit. R.C. 5747.70 supplies the conditions.

The May 18, 2026 CollegeAdvantage offering statement says a qualifying Roth IRA rollover is not subject to recapture of previous Ohio deductions. Federal requirements still apply: direct trustee transfer to the beneficiary’s Roth, account seasoning, the five-year contribution/earnings lookback, the annual limit and a $35,000 lifetime ceiling. Ordinary withdrawals or other outbound rollovers can have different recapture treatment. The plan’s Ohio tax disclosure and IRS Publication 590-A describe the distinction. The separate 529-to-Roth guide covers the federal conditions in more detail.

Medicaid: tax-free does not mean uncounted

For resource-tested Ohio Medicaid, a Roth can still matter. The retirement-fund rule considers legal access, accessible cash value and qualifying periodic payments. It specifically addresses Roth IRAs and defines regular payments as predictable, uniform amounts at a consistent interval for more than one year. A single or irregular withdrawal is not an automatic resource-exclusion strategy. Ohio Admin. Code 5160:1-3-03.10 must be read for the applicable category.

The rules also distinguish anticipated from unanticipated nonrecurring lump sums. An ineligible spouse’s fund exclusion from a specified deeming test is not the same as blanket community-spouse protection. And Ohio’s estate recovery can extend beyond probate, with surviving-family, hardship and other limits. A beneficiary designation alone is not proof of exemption. See the lump-sum income rule and R.C. 5162.21. Medicaid eligibility and planning require a separate, situation-specific review.

Comparing Ohio with another state

Compare the same account type, income measure, year, age, address and move facts. The example above is an Ohio rate illustration—not a common-state scenario, a protection grade or a ranking. Other states’ retirement deductions and exemption rules cannot be substituted into it.

Start with the Arizona, Pennsylvania, Florida or California guide for that state’s own explanations and sources.

A practical check before relying on a number

• Identify the federally taxable conversion portion, not just gross IRA dollars.
• Determine the state base and district base separately.
• Check the actual municipality, district, rate and receipt period.
• Use the right income measure and year for credits and homestead relief.
• For a move, confirm domicile and transaction timing; for protection, confirm applicable law and the particular claim.

Three short answers to common assumptions

Does 2.75% always give the full Ohio conversion cost?

No. It is the marginal rate in the stated nonbusiness schedule above the zero-tax band. Credits, exemptions, district tax, municipal exceptions and other income effects need separate checks.

Does Ohio protect every IRA from every creditor?

No. The state statute has domicile, account, contribution and claim conditions. Inherited rights and federal bankruptcy exemptions involve different rules.

Can I use the conversion worksheet to check homestead eligibility?

No. Homestead uses a different income measure, prior-year household income and year-specific eligibility rules. The worksheet does not determine benefit qualification.

Downloads: a bounded illustration and source reference

The workbook has four sheets: Conversion, Before you use, Rules and Sources. It compares an isolated state schedule amount before and after an added taxable amount, then adds a separately supplied traditional-base district increment. It does not prepare a return, determine benefit eligibility, calculate municipal tax or recommend a move/conversion date.

The CSV is the supporting source reference. Read each row’s applicable period and actual check date. Historical publications, current statutes and hypothetical assumptions are not interchangeable. Unsupported legacy claims are withheld rather than exported as verified facts.

Reuse with attribution to RothIRAHub and a link to this guide, subject to the reuse terms. Government materials retain their own terms. This is educational content, not personal tax, legal or investment advice.

Article history and corrections

October 3, 2026 — factual corrections

Corrected the blanket municipal-tax and creditor-protection claims; distinguished inherited-account state protection from the federal bankruptcy exemption; corrected income measures, credit conditions and homestead tax-year labels; and clarified withholding, moving, public-plan and Medicaid limitations. Replaced unsupported cross-state and personal eligibility/timing outputs with a bounded rate illustration and corrected source references. See the dated correction record.

October 3, 2026 — source update

References now identify the current applicable statutory editions, including the September 23, 2026 homestead statute. This source update is separate from correcting earlier claims that were already inaccurate.

August 2, 2026 — calculator correction

At this guide’s original publication, the Ohio rate used in the conversion-cost calculator and conversion planner was corrected from the older 3.5% assumption to the 2026 2.75% marginal-rate assumption. For an isolated $100,000 amount wholly in that marginal band, the difference is $750. That historical arithmetic is not a guarantee of every taxpayer’s complete conversion cost.

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