Answer that question yes in TurboTax (TT), and it will give you the credit. She is retired for purposes of the Ohio Retirement Credit. The key is that she is retired from THAT job (the one she receives the pension from). As long as her pension was included in your Federal AGI, it is being taxed by Ohio and qualifies you for the retirement credit. The fact that she is still working elsewhere doesn't mean she is not retired from the job paying the pension.
