I live in Ohio and am retired from both the Air Force and Federal Civil Service. Ohio does not tax military pensions and allows limited deductions from federal pensions. TurboTax Ohio Adjustment worksheet does not seem to accurately calculate this deduction. The Ohio Tax Instruction booklet lists the calculation and includes an example for “Joe” but even when I use the their example numbers TurboTax displays a different answer than theirs. Please investigate this discrepancy.
From Ohio Tax Instructions:
Line 33 - Uniformed Services Retirement Income
Deduct military retirement income if both of the following are true:
- The income is included in federal adjusted gross income; AND
- The income is related to your service in the uniformed services or reserve components thereof, or the National Guard.
The term "uniformed services" includes the Army, Navy, Air Force, Marine Corps, Space Force, Coast Guard, the commissioned corps of the National Oceanic and Atmospheric Administration, and the Public Health Service.
If you served in the military and receive a federal civil service retirement pension, you are eligible for a limited deduction based on the amount of your federal retirement pay that is attributable to your years of military service. You can contact the Office of Personnel Management if you need assistance in determining your military and total service time used in your retirement calculation.
Example: Joe served in the Army for 10 years and then worked for the U.S. National Parks Service for an additional 20 years before retiring, a total of 30 years of federal service time. Joe's total federal pension is $100,000, $90,000 of which is included in his federal adjusted gross income. In calculating his Ohio deduction, Joe should divide 10 years by 30 years, and then multiply the result by $90,000 [90,000 X 10/30]. Thus, Joe can deduct $30,000 or 1/3 of the portion of his retired personnel pay included in federal adjusted gross income.
Additionally, deduct amounts collected under a "survivor benefit" plan by a surviving spouse or former spouse of a deceased member of the "uniformed services." You may be required to provide a copy of the federal 1099-R to verify this deduction.
Note: Amounts deducted on this line cannot be used to calculate the retirement credit or the lump sum retirement credit on the Ohio Schedule of Credits.
TurboTax Uniformed Services Calculation:
2 Federal Pension 90000
3 years of military service 10
4 years of civilian employment 30
5 Federal civil service pension deduction 22500 (30000?)
