What qualifies for this Military/Civil Service Retirement Deduction?

If you retired from service in the active or reserve components of the U.S. Army, Navy, Air Force, Marine Corps, Coast Guard, or National Guard, commissioned corps of the National Ocean and Atmospheric Administration or the Public Health Service, you can deduct your military retirement income to the extent that income is not otherwise deducted or excluded in computing federal or Ohio adjusted gross income.

If you served in the military and receive a federal civil service retirement pension, you're also eligible for a limited deduction if any portion of your federal retirement pay is based on credit for your military service. You can deduct only the amount of your federal retirement pay that is attributable to your military service.

If you're eligible for this limited deduction, refer to your federal civil service retirement benefit handbook to determine the number of years of your military service. Divide the number of years of military service by the total number of years of combined military service and civilian employment with the U.S. government. Take this fraction and multiply it by the amount of your federal civil service pension you have included on line 1 of this return. The resulting number is the amount of your federal civil service pension that you can deduct.

Example: The taxpayer has included on line 1 of this return $60,000, which the taxpayer received as a federal civil service pension. The taxpayer has 15 years of military service and 45 years of combined military service and civilian employment with the U.S. government. The fraction is 15/45 = 1/3. The taxpayer can deduct $20,000 here: 1/3 x $60,000.

If you don't have your federal civil service retirement handbook, contact the U.S. Office of Personnel Management (OPM) at 1-888-767-6738 or TDD 1-800-878-5707. You may also email OPM at retire@opm.gov or visit the OPM website to request the booklet. Please be sure to specify that you want a replacement booklet (there are other types). An OPM customer service representative will tell you how much military and total service time you have in your retirement calculation and can mail you a screen print or short form letter with the information.

The military retirement income also applies to such amounts received by the surviving spouse or the former spouse of each military retiree who is receiving payments under the survivor benefit plan.

Please note that Ohio may later ask you for a copy of the divorce agreement and IRS Form 1099-R as verification for the deduction. Note that child support receipts, regardless of the source, are not included in federal adjusted gross income, so you can't deduct these amounts.

Also enter Military Injury Relief Fund amounts you reported on line 1 (federal adjusted gross income). You don't have to include in the federal adjusted gross income, and you can't enter, those Military Injury Relief Fund amounts you received on account of physical injuries or psychological injuries, such as post-traumatic stress disorder, if those injuries are a direct result of military action Operation Iraqi Freedom or Operation Enduring Freedom. But you must include any other Military Injury Relief Fund amounts you received.

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