Ohio Retirement Tax Friendliness. Social Security retirement benefits are fully exempt from state income taxes in Ohio. Any income from retirement accounts (like a 401(k) or an IRA) or pensions is taxed as regular income (but there are credits available).
Take care to enter it in the Federal Taxes according to these instructions:
SS benefits are not taxable in Ohio. You've done something wrong. The exclusion of SS benefits is so automatic, in TurboTax, that I'm having a hard time seeing how the mistake could be made. You may need to start over.
A possible explanation, you some how included SS on the retirement income allocation screens. Look a Ohio form IT NRC.
Ohio does a convoluted tax calculation for non-residents/part year residents. It calculates tax on total income, then it calculates a non resident/part year resident credit, which it subtracts from the tax it calculated on the total income. The credit is calculated as your non-Ohio income divided by Total adjusted Income multiplied by the total tax. TurboTax (TT) does this by allocating your income as either Ohio or non-Ohio. W-2 income will be allocated by the state name abbreviation shown in box 15 of your W-2. TT will ask you, item by item, in the state section, how much of your other income is Ohio or non-Ohio income. Make sure that your non-Ohio wages show GA (Other state postal abbreviation) in box 15 of your W-2 screen, with the GA amount in box 16.
This system allows Ohio to apply their highest tax rate, based on your total income, while only taxing your Ohio income.
Ohio has a nonresident credit allocation form.. IT NRC
If you used Turbo tax there was a program error relating to the adjustment for Social Security for tax year 2018. A friend of mine got a notice from Ohio because she had deducted too much for Social Security income in the Ohio adjustments.
Otherwise, double-check your return and compare to the federal return to see if there is a mistake in your filing.
Only the portion of Social Security benefits that was taxable on the federal return is deductible on the Ohio return.
For example, if your received $20,000 in total benefits (line 5a of form 1040) but only reported $17,000 as taxable (line 20b), then you only deduct $17,000 on the Ohio return.