Updated October 7, 2026. Quick answer: Not unless you ask, and not right away. Ohio law lets a recipient request withholding: “Any recipient may request the recipient’s retirement system or retirement plan” to withhold state income tax from benefits.
Drawing a pension? Whether the state withholds tax from it, from its own documents: Ohio tax withholding on pension payments.
Ohio withholding at a glance
| Item | What the documents say |
|---|---|
| Is it required? | No. The statute provides a request, not mandatory or default withholding |
| Rate or amount | No percentage: your application estimates the tax due, and the plan withholds that amount apportioned through the calendar year |
| How to start or stop it | An application on a form the retirement system or plan supplies; an amended application raises or lowers it |
| Direct rollover | Not stated in the documents read |
| Changed for 2026? | The statute read took effect September 30, 2025; no other change is stated |
What the Ohio documents say
Section 5747.071 of the Ohio Revised Code, headed withholding tax from retirement benefits, says “Any recipient may request the recipient’s retirement system or retirement plan” to withhold. The request is an application on a form the system or plan supplies.
The application must include “an estimate from the recipient of the amount of state income taxes” due for the coming year. The statute adds that “The amount to be withheld for a calendar year shall be apportioned” through that year, and that “A recipient may submit an amended application to increase or decrease” the amount.
A $50,000 withdrawal: cash in hand or a direct rollover
Take a $50,000 401(k) withdrawal paid to you. The IRS says a taxable eligible rollover distribution paid to you from an employer plan is subject to “mandatory income tax withholding (generally at a rate of 20%)”, which on $50,000 is $10,000 (computed as $50,000 times 20%) held back for federal tax. Ohio sets no percentage for it: the Ohio amount withheld is $0 unless you applied to the plan, and the statute starts any withholding in the calendar year after the application, spread across that year, so it is not a rate taken from one withdrawal.
The other path is a direct rollover to an IRA or another plan. For federal tax the IRS says “The mandatory withholding doesn’t apply in a direct rollover”. The Ohio documents read do not say how a direct rollover is treated for state withholding, so confirm it with the payer before choosing.
What a mover should know
This page is about Ohio as a state of residence. An instruction line written for a nonresident or part-year filer is not the rule for a resident, and none of the documents read settles a part-year or two-state case, so check each state’s own rule. The federal side is the same everywhere; CMG’s federal 20% withholding on a pension lump sum page covers it.
What the documents do not say
- The one document read is the statute. It names no state-numbered form, does not address a direct rollover, and the Department of Taxation’s own instructions were not read.
Common mistakes
- Expecting the plan to withhold Ohio tax from a single withdrawal in the same year you apply; the statute starts it in the next calendar year.
- Treating the estimate as a rate; the plan withholds the estimated annual amount apportioned across the year.
- Assuming the answer for one state applies to another, or that state withholding settles the state tax owed at filing.
Related: how Ohio taxes 401(k) and IRA withdrawals, Ohio retirement taxes, retirement withholding calculator, and retirement taxes by state.
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Answer againSources
- Section 5747.071, Withholding tax from retirement benefits: https://codes.ohio.gov/ohio-revised-code/section-5747.071
- IRS Tax Topic 413, Rollovers from retirement plans: https://www.irs.gov/taxtopics/tc413
Sources: the primary documents linked above, read on October 7, 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.