What military pay can I deduct?

If you are an Ohio resident servicemember, you can deduct your active duty military pay and allowances that are included in federal adjusted gross income, as long as those amounts were received while you were stationed outside of Ohio. Do not deduct any other types of income such as civilian wages, interest, dividends, or capital gains.

Please note that the Nov. 11, 2009 amendment to the Servicemembers Civil Relief Act of 2003 does not apply to Ohio-domiciled spouses of servicemembers who reside with their spouses outside the state. These spouses are presumed to retain their Ohio domicile.

The term "stationed" means your permanent duty station as an Ohio active duty servicemember, or an Ohio resident servicemember in the National Guard or military Reserve forces. For purposes of this exemption, "permanent duty station" means the military installation where you're currently assigned and physically located under competent orders that don't specify the duty as temporary. Periods of training in which you, either individually or as part of a unit, leave your permanent place of duty and then return following the completion of the training, aren't included in the definition of "stationed". However, periods of active duty outside Ohio for purposes other than training, or periods of training greater than 30 days outside Ohio, as described below, qualify you for this exemption.

If you're stationed inside Ohio, your military pay and allowances will continue to be subject to Ohio individual income tax. These amounts will also be subject to school district income tax if you're domiciled in a taxing school district, even if you didn't reside in the school district at any time during the taxable year.

Examples of military pay and allowances that do qualify for this deduction include the following amounts, but only if you received the amounts while stationed outside Ohio:
  • Military pay and allowances you received while a member of the active component of the U.S. armed forces and assigned to a permanent duty station outside Ohio.
  • Military pay and allowances you received while a member of the active component of the U.S. Armed Forces, if you're assigned to a permanent duty station inside Ohio, only for periods of duty outside Ohio for purposes other than training, or periods of training greater than 30 days outside Ohio.
  • Military pay and allowances you received while a member of the Ohio National Guard or the Reserve components of the U.S. Armed Forces in an active duty status outside Ohio, or for periods of training greater than 30 days, outside Ohio.
  • Military pay and allowances you received while a member of a unit of the Ohio National Guard or the Reserve components of the U.S. Armed Forces under federal mobilization orders under which the unit mobilizes for training at a non-Ohio location followed by an operational deployment to any non-Ohio location.
  • Military pay and allowances received by cadets at the U.S. service academies, specifically the Military Academy, the Air Force Academy, the Coast Guard Academy and by midshipmen at the Naval Academy. Cadets and midshipmen who are serving on active duty under the provisions of 38 United States Code section 101(21) and are eligible for this deduction for the pay they receive while stationed at these facilities to the extent that this pay is included in federal adjusted gross income (line 1 on Ohio form IT 1040). However, this deduction is not available for pay received for service in the Reserve Officer Training Corps.

Even if all your income is military pay, and thus exempt from Ohio income tax, you are still required to file an Ohio personal income tax return.

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