Updated October 4, 2026. Quick answer: Yes. Ohio counts retirement-plan income in Ohio adjusted gross income: the 2025 booklet describes income “such as traditional IRAs or 401(k) plans” that is “included in your Ohio adjusted gross income (AGI)”. A retirement income credit of at most $200 can reduce the tax.
More state retirement-income schedules, line by line: Ohio retirement income credit.
Inherited an IRA? What the state’s own documents say about taxing those withdrawals: Ohio tax on inherited IRA withdrawals.
Hold a 403(b) or 457(b)? What the state’s own documents say about taxing those withdrawals: does Ohio tax 403(b) and 457(b) withdrawals.
Withdrawing from an IRA or 401(k)? Whether the state withholds tax from it, from its own documents: Ohio tax withholding on IRA and 401(k) withdrawals.
Inheriting from, or planning for, someone in this state? Whether the state has an inheritance tax, from its own tax documents: Does Ohio have an inheritance tax?.
What Ohio does with 401(k) and IRA withdrawals
On the 2025 return the booklet says “the highest tax rate has been reduced to 3.125%”. For 2026 the statute reads: “$332.00 plus 2.75% of the amount in excess of $26,050”.
| Item | What the documents say |
|---|---|
| Treatment | Taxable; a retirement income credit, at most $200 per return, applies when MAGI less exemptions is under $100,000 |
| State rates | 2025: highest rate 3.125%. 2026 and after: $332.00 plus 2.75% over $26,050 |
| Source | Ohio Department of Taxation, 2025 IT 1040 booklet; Ohio Revised Code 5747.02 |
A $40,000 withdrawal
All $40,000 of a traditional withdrawal is part of Ohio income. The tax it adds depends on your other income, because the schedule starts above $26,050; the credit, if you qualify, is at most $200.
Conditions that decide the answer
- The credit needs MAGI less exemptions under $100,000 and income received on account of retirement.
- Amounts deducted on the Ohio Schedule of Adjustments, such as Social Security benefits and uniformed services retirement income, do not qualify.
- The credit steps from $25 at $501 to $1,500 of retirement income, to $50, $80 and $130, and reaches $200 at $8,001 or more.
Single-filer rate schedule
| 2025 rate | Taxable nonbusiness income |
|---|---|
| 0.000% | Up to $26,050 |
| 2.75% | $26,050 to $100,000 |
| 3.125% | Over $100,000 |
What changes in 2026
For taxable years beginning in 2026 and after, Ohio Revised Code 5747.02 sets the rate shown above, replacing the 2025 top bracket.
Federal rules
The state’s treatment sits on top of the federal one. The IRS explains the federal tax on these withdrawals in Publication 590-B, Distributions from Individual Retirement Arrangements and Publication 575, Pension and Annuity Income.
Related: whether Ohio taxes pensions, how Ohio taxes retirement income, whether Ohio taxes Roth conversions, and the state-by-state table of 401(k) and IRA withdrawal tax.
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Answer againSources
- Instructions for Filing Original and Amended: Individual Income Tax (IT 1040) and School District Income Tax (SD 100), Tax Year 2025: https://tax.ohio.gov/static/forms/ohio_individual/individual/2025/it1040-booklet.pdf
- Annual Tax Rates: https://tax.ohio.gov/individual/resources/annual-tax-rates
- Section 5747.02 Tax rates (Ohio Revised Code): https://codes.ohio.gov/ohio-revised-code/section-5747.02
Sources: the primary documents linked above, read on October 4, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.