Updated October 21, 2026. Quick answer: The Ohio Schedule of Credits carries two retirement credits for people who receive pension or retirement plan income: line 2, the retirement income credit, and line 3, the lump sum retirement credit. Each has its own list of conditions in the IT 1040 instructions, and taking line 3 shuts off line 2. The credits flow into the schedule’s totals and then onto the Ohio IT 1040.
What this form does
The schedule opens with its own name and a page label: “2025 Ohio Schedule of Credits” and “2025 Schedule of Credits”. It sits in the Nonrefundable Credits block, and the instructions describe that part of the booklet this way: “Many of these credits are based, in part, on your modified adjusted gross income (MAGI).” For a retiree the two lines that matter are line 2 and line 3.
This page follows the schedule and the booklet’s instructions for those two lines. Ohio retirement taxes and whether Ohio taxes pensions give the state-level picture.
Who it applies to
The booklet gives each credit a list of conditions. For line 2 it opens with “To qualify, all of the following must be true:” and then lists “Your MAGI less exemptions is less than $100,000;” plus the plan, timing and income conditions shown in the table below. The last condition is “You have not previously taken the Ohio lump sum retirement credit.”
Line 3 uses the same lead-in and the same income test, “Your MAGI less exemptions is less than $100,000;” and then adds “The income is included in your Ohio AGI;” and “You have not previously claimed this credit.”
The booklet also warns about the link between the two lines: “If you take this credit, you cannot take the retirement income credit on this year’s return or any future return.”
The lines, one by one
| Line | What the form says |
|---|---|
| Line 1 | “Tax liability before credits (from Ohio IT 1040, line 8c)” |
| Line 2 | “Retirement income credit (include 1099-R forms)”. Instructions: “You received income from a pension, profit-sharing, or retirement plan (such as traditional IRAs or 401(k) plans);” |
| Line 2, timing | “This income was received on account of retirement;” and “This income is included in your Ohio adjusted gross income (AGI); AND” |
| Line 2, table | “Use Table 2 on page 44 to determine your credit based on your and your spouse’s (if filing jointly) total eligible retirement income.” That table is printed in the booklet and is not read on this page. |
| Line 3 | “Lump sum retirement credit (include a copy of the worksheet and 1099-R forms)”. Instructions: “You received a total, lump sum distribution on account of retirement;” |
| Line 3, plan type | “The distribution must have come from a qualified pension, retirement, or profit-sharing plan; AND” |
| Line 3, worksheet | “A “total distribution” is generally indicated in box 2b of your 1099-R.” “Use the worksheet on page 43 to calculate this credit.” |
| Line 10 | “Total (add lines 2 through 9)” |
| Line 40 | “Total nonrefundable credits (add lines 10, 36, 38, and 39; enter here and on Ohio IT 1040, line 9)” |
The booklet defines the term the worksheet uses: “”Retirement income” means retirement benefits, annuities, or distributions that are made from or pursuant to a pension, retirement, or profit-sharing plan.” It adds that “these amounts must have been received on account of retirement and must be included in your Ohio adjusted gross income.”
The figures the form prints
Two figures sit inside single running sentences. The income test reads “Your MAGI less exemptions is less than $100,000;” and the cap on line 2 reads “The maximum credit per return is $200.” The credit amounts themselves come from Table 2 on page 44, which is a table and is not read here.
The booklet also says what is left out of line 2: “Amounts deducted on the Ohio Schedule of Adjustments (such as Social Security benefits and uniformed services retirement income) do not qualify for this credit.”
Where the result goes next
On the schedule, line 10 reads “Total (add lines 2 through 9)”, and page 2 ends the nonrefundable block with “Total nonrefundable credits (add lines 10, 36, 38, and 39; enter here and on Ohio IT 1040, line 9)”. For the lump sum credit, the worksheet’s own instruction is “Enter on the Ohio Schedule of Credits, line 3”.
Your payers’ figures come from Form 1099-R; see 1099-R boxes explained, Form 1040 line 5a and 5b and Form 1040 line 4a and 4b for how the federal return reports the same payments. For how Ohio treats Ohio 401(k) and IRA withdrawals and Ohio annuity income, see those pages.
Edition and line numbers
This page reads the 2025 Ohio Schedule of Credits and the 2025 Ohio IT 1040 Instructions Booklet for tax year 2025, the current file Ohio Department of Taxation served on 2026-10-21. Check the edition printed on your own form and use that edition’s line numbers.
Common mistakes
- Claiming both retirement credits. The booklet says “If you take this credit, you cannot take the retirement income credit on this year’s return or any future return.”
- Counting Social Security or uniformed services retirement pay toward line 2. The booklet says “Amounts deducted on the Ohio Schedule of Adjustments (such as Social Security benefits and uniformed services retirement income) do not qualify for this credit.”
- Counting a rollover as retirement income on the lump sum worksheet. The worksheet instructions say not to include “Rollovers from one retirement plan into another that are not included in your federal adjusted gross income;”
Related: Ohio retirement taxes, whether Ohio taxes pensions, Ohio 401(k) and IRA withdrawals, Form 1040 line 5a and 5b, and 1099-R boxes explained.
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Answer againSources
- 2025 Ohio Schedule of Credits, Ohio Department of Taxation: dam.assets.ohio.gov
- 2025 Ohio IT 1040 Instructions Booklet, Ohio Department of Taxation: dam.assets.ohio.gov
- Related official page (not quoted): Senior Citizens and Ohio Income Taxes, Ohio Department of Taxation: tax.ohio.gov
Read from the state revenue documents linked above on October 21, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer or the state revenue department is the right place to confirm anything consequential.