Ohio Retirement Income Credit and Nonqualified Retirement Income

[xoxo232]

When my late husband died in 2008, I began receiving monthly continuation of his STRS pension benefit. I was not yet retired myself. Then when I personally retired in 2015, I began taking monthly distributions from my own personal rollover IRA in addition to continuing to receive my late husband's STRS pension benefit. Based solely on my own monthly IRA distributions, I qualify for Ohio's Retirement Income Credit of $200. However, I am never sure what, if anything, to enter in the TurboTax section on "Nonqualified Retirement Income" where I am instructed to "Enter any retirement income that does not qualify for the retirement income credit (see attached). Example would be IRA or pension income reported on your federal return before you retired." Since I did, in fact, receive half of my late husband's monthly retirement pension before I retired and it is reported on my federal return, should I enter this amount as "nonqualified retirement income?"

Thank you.

[ShirlynW]

No.STRS Ohio is a qualified plan under Section 401(a) of the Internal Revenue Code.

 Here's how you enter your 1099-R:

1. Open TurboTax.
2. Go to Wages and Income.
3. Edit 1099-R.
4. Enter 1099-R.
5. Continue to screen, "What Kind of retirement plan…",  select "Qualified plan".
6. Continue until. 

[xoxo232]

My question had nothing to do with how to enter my 1099-R on my federal return. My question is about the Ohio Retirement Income Credit and whether the STRS survivor pension I received prior to my own retirement can be included in determining my eligibility for the Ohio Retirement Income Credit now that I am finally retired myself.

[Vanessa A · Accepted solution]

You are not eligible to claim the Ohio Retirement Income Credit for the survivors pension.  You can only use retirement income that you are getting "on account of retirement"  Early withdraws and distributions do not qualify for this credit.  

So, if you are now retired and are receiving your own retirement income because you have retired you can only use this retirement income to claim the Ohio Retirement Income Credit. 

[xoxo232 · Accepted solution]

Thank you for finally answering my question!

One last follow-up question: Since my survivor's pension that started before my own retirement (but is ongoing until my death) is not eligible to claim the Ohio Retirement Income Credit, should I enter that pension income as "Nonqualified Retirement Income" (as shown in the screenshot below from TurboTax)?

[DianeW777 · Accepted solution]

Yes, your retirement received as survivor should be listed here since it does not qualify for the retirement income credit.  

• OH Retirement Income Credit information page.
• OH Income Tax Instructions (page 20)

[xoxo232]

I sooooo much appreciate your specific response to my specific question!👏