Updated October 16, 2026. Quick answer: Ohio offers a retirement income credit of at most $200 for income received on account of retirement, available only when modified adjusted gross income less exemptions is under $100,000, and a separate deduction for survivor benefits, and its documents do not say whether an inherited IRA distribution is either.
Ohio at a glance
| Item | What the documents say |
|---|---|
| How the state taxes retirement-account income | Taxed as income, with a retirement income credit and a survivor benefits deduction |
| Do the state’s documents address beneficiaries? | Survivor benefits (amounts received because of the death of another individual) are deductible; whether an inherited IRA counts is not stated |
| Retirement exclusion or credit | Retirement income credit of at most $200 (a credit, not an exclusion), for income received on account of retirement, only if MAGI less exemptions is under $100,000 |
| Rate in the documents read | $332.00 plus 2.75% of the amount over $26,050 for 2026 and after |
| State inheritance or estate tax | Not mentioned in the documents read |
| Changed for 2026? | R.C. 5747.02 prints $332.00 plus 2.75% of the excess over $26,050 for taxable years beginning in 2026 and after |
What the Ohio documents say
The IT 1040 instructions describe the retirement income credit as available for income “received on account of retirement” and cap it: “The maximum credit per return is $200”. The credit is available only when modified adjusted gross income less exemptions is less than $100,000.
Ohio also allows a deduction for survivor benefits. The instructions say survivor benefits include “any amount received because of the death of another individual” to the extent included in federal adjusted gross income, and that amounts payable without the death of a covered individual as a precondition are not survivor benefits.
R.C. 5747.02 prints the rate for 2026 and after as “$332.00 plus 2.75% of the amount in excess of $26,050”.
The federal 10-year rule and your Ohio tax year
IRS Publication 590-B says a beneficiary may be required to take the entire account balance by the “end of the 10th year following the year of the owner’s death”, with exceptions for certain beneficiaries. Because the balance generally has to come out within that window, the timing of each withdrawal decides which tax year it lands in. See the 10-year rule and annual RMDs, lump sum versus spreading withdrawals and inherited IRA rules.
Withholding and other state taxes
Whether a state withholds from a withdrawal is a separate rule: see state withholding on retirement withdrawals. For Ohio’s own death taxes, see Ohio inheritance tax.
What the documents do not say
- The documents read do not say whether an inherited IRA distribution is a survivor benefit or earns the retirement income credit.
- They say nothing about a deduction or credit for estate tax or income in respect of a decedent.
- A credit that depends on income received on account of retirement may not fit a beneficiary who has not retired.
Common mistakes
- Assuming Ohio’s rule for your own retirement income also covers an account you inherited: read whether its documents address beneficiaries, and confirm the point with a Ohio preparer.
Related: state tax on inherited IRA withdrawals, state by state, whether Ohio taxes 401(k) and IRA withdrawals, Ohio retirement taxes, Ohio inheritance tax, inherited IRA rules, spouse versus non-spouse beneficiary 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
- Section 5747.01 Definitions (Ohio Revised Code): https://codes.ohio.gov/ohio-revised-code/section-5747.01
- Section 5747.055 Tax credit for retirement income (Ohio Revised Code): https://codes.ohio.gov/ohio-revised-code/section-5747.055
- Section 5747.02 Tax rates (Ohio Revised Code): https://codes.ohio.gov/ohio-revised-code/section-5747.02
- IRS Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs): https://www.irs.gov/pub/irs-pdf/p590b.pdf
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.