Military etirees in Ohio--Now No Taxes on Retirement Pay

[samclem]

I got the below email today from the head of the Air Force Association in Ohio.
I can't say I'm in favor of it (hey, what about the retirement checks received by GM workers, firemen, teachers. etc? Are they tax-free, too?).
But, a lot of other states do this, and Ohio will still be getting money from us.

********************************************

It is indeed an honor and pleasure to inform you that at noon today I had the opportunity to represent each member of the Air Force Association across Ohio as Governor Ted Strickland signed into law House Bill 372 that allows tax exemption of military retirement pay, along with other benefits.

This landmark legislation was championed by a by-partisan group of Ohio legislators from both the Senate and House of Representatives. Leading this effort was State Senator Larry Cates, Senator Steve Austria, Senator Ron Amstutz, Speaker of the House Jon Husted, Representative Ross McGregor, Representative Pete Ujvagi, and many others.

We owe a debt of gratitude to the entire Ohio General Assembly for their recognition of the importance of this legislation and the speed in which they moved it through both chambers and on to the governor. Governor Strickland is to be commended for his leadership, vision, and speed which he demonstrated in signing it into law today.

Numerous organizations across Ohio joined with the Air Force Association in supporting and testifying on behalf of this bill. Significant leadership was provided by the Dayton Area Chamber of Commerce, among others.

Thanks also to those of you who reached out to your elected officials in support of this legislation. Your efforts paid off today and in the future for all Ohioans as we reap the benefits of keeping those military members, the best and brightest our nation has to offer, here in Ohio.

Sincerely,

John W. McCance
President
Air Force Association
State of Ohio
2406 Hillsdale Dr
Beavercreek, OH 45431

[Khan]

Were all the military retirees threatening to leave Ohio?

[samclem]

Originally Posted by Khan

Were all the military retirees threatening to leave Ohio?

No. The backers claimed that people finishing a military career were leaving Ohio rather than retire here. This was hurting the state because of the loss of spending from these folks and also because lots of contractors need/want to hire these people with recent military experience.

When I retired, one of the counselors doing the paperwork looked at me like I was crazy for staying, and reminded me again that Ohio would tax my retirement pay. In the grand scheme of things, if a guy can get a lucrative contracting job in Ohio and likes it here, he'd be shortsighted to leave just because of this tax on his retired pay--for most people it probably comes to less than $1000 per year. Now, for somebody that's ONLY getting military retirement pay, a non-taxing state might look a lot better.

[jIMOh]

if the politicans changed the weather climate, I bet they would find those retirees would not have left the state.

That and the state income tax here seems to bite me harder than the federal.

I get 4 figures back from federal each year, yet owe the state more each year. Each year we withhold more in state taxes, and take out less in federal, yet we owe more to state when we file than we did the previous year. It has gotten to point we stop adjusting state withholding and just pay the bill from the federal refund. I'd prefer to net zero on the tax return, but Ohio taxes do not appear to be that simple to predict.

[restonham]

At least Ohio is better than Virginia. A few years ago, there was a federal court decision that said states that exempt state pensions from tax had to apply the same treatment to federal and military pensions. Many states that provided that exemption applied it to all government pensions. Virginia chose the opposite tactic - they simply eliminated the exemption for state employees so everyone would have to pay.

But that alone is still not a reason to leave the state. In my opinion, there has to be a lot more than that.

[OAG]

I am starting to wonder about this thread and the purported e-mail from the AF Association President. I have not been able to find any information besides this on the legislation. Anyone have any further information like effective date and other details?

[Tomcat98]

I was stationed in Ohio once. Thought it was the best place ever til I went to Colorado. That kind of put it in perspective. Looking back being in Dayton was the longest 2 1/2 yrs of my life. Its all relative I guess.

Tomcat98

[UncleHoney]

Originally Posted by R Wood

I am starting to wonder about this thread and the purported e-mail from the AF Association President. I have not been able to find any information besides this on the legislation. Anyone have any further information like effective date and other details?

There wasn't much about it in the Dispatch or on local TV. The Toledo Blade has the story.

toledoblade.com -- Ohio won't tax military pensions; Strickland vows exemption costing $30M

[UncleHoney]

Originally Posted by Tomcat98

I was stationed in Ohio once. Thought it was the best place ever til I went to Colorado. That kind of put it in perspective. Looking back being in Dayton was the longest 2 1/2 yrs of my life. Its all relative I guess.

Tomcat98

When you retire you'll have to move back to Ohio so you can enjoy those extra long years we have.

[OAG]

UH: Yes, I was able to find one of the actual bills and found the information along with the effective date which is 1 Jan 2008 and beyond.

[restonham]

Originally Posted by R Wood

UH: Yes, I was able to find one of the actual bills and found the information along with the effective date which is 1 Jan 2008 and beyond.

That's great - thank you. Maybe this will spread to other states. Even though most military pensions are relatively small, it all helps.

[Tomcat98]

Originally Posted by UncleHoney

When you retire you'll have to move back to Ohio so you can enjoy those extra long years we have.

Something like that

[JPatrick]

Missouri has done the same thing, and included exemption of social security.
All of this will be phased over 5 years and I believe some teachers/fire/police may be included.
There are income limits, but they are quite high.
An unexpected bonus for this recent arrival

A study is underway looking at the total elimination of the income tax. If implemented, the shortfall would be made up by increased sales tax. I'm not holding my breath on this one.