Updated October 16, 2026. Quick answer: Ohio taxes retirement distributions included in Ohio adjusted gross income and gives a retirement income credit of up to $200 per return; the booklet does not name 403(b) or 457(b) plans.
More state retirement-income schedules, line by line: Ohio retirement income credit.
Ohio at a glance
| Item | What the documents say |
|---|---|
| How the state treats 403(b) and 457(b) withdrawals | Taxable, with a retirement income credit |
| Do the state’s documents name these plans? | The documents read name neither 403(b) nor 457(b) plans |
| Retirement exclusion or credit | Retirement income credit of up to $200 per return, a credit and not a deduction |
| Public-employee pension rule | No separate public-employee exclusion described |
| Rate in the documents read | 2.75% above $26,050 for 2026 and later, per the statute page |
| Changed for 2026? | The rates change for taxable years beginning in 2026 |
What the Ohio documents say
The Department of Taxation’s booklet says the credit requires income from a “pension, profit-sharing, or retirement plan”, given as examples traditional IRAs and 401(k) plans, and that the income was received on account of retirement and is included in Ohio adjusted gross income. It says “The maximum credit per return is $200” and the credit requires modified adjusted gross income less exemptions under $100,000.
The Legislative Service Commission’s rate text for taxable years beginning in 2026 and later reads “$332.00 plus 2.75% of the amount in excess of $26,050”.
Withholding and federal tax
Whether a state withholds is a separate rule: see state withholding on retirement withdrawals. Federal rules: 403(b) withdrawal rules and 457(b) withdrawal rules. The IRS says pension and annuity payments from a qualified employer plan have “all or some portion of the amounts you receive may be taxable”.
What the documents do not say
- The booklet does not name 403(b) or 457(b) plans. It defines retirement income for the credit as retirement benefits, annuities or distributions made from or pursuant to a pension, retirement, or profit-sharing plan, received on account of retirement and included in Ohio adjusted gross income, so whether a particular 403(b) or 457(b) withdrawal meets that definition is not answered by name.
- The booklet read covers 2025; the 2026 rates come from the statute text.
Common mistakes
- Assuming Ohio’s rule for a 401(k) or IRA also covers a 403(b) or 457(b): read whether its documents name the plan.
Related: whether Ohio taxes 401(k) and IRA withdrawals, Ohio retirement taxes, whether Ohio taxes pensions, 403(b) withdrawal rules, 457(b) withdrawal rules, and state withholding on retirement withdrawals.
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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
- IRS Tax Topic 410, Pensions and annuities: https://www.irs.gov/taxtopics/tc410
Sources: the primary documents linked above, read on October 16, 2026. General information, not tax advice. Your own facts decide the outcome, and a tax professional or the state agency itself is the right place to confirm anything consequential.