If I’m retired and living in Pennsylvania, but my income is from an Ohio pension, will it be taxed by Pennsylvania?

Nov 19, 2018

I am retired and live in Pennsylvania, but my income is from an Ohio pension. I understand that there is a tax reciprocity arrangement between Ohio and Pennsylvania, so how exactly am I affected?

Pennsylvania is a tax-friendly state for retirees. If you are a Pennsylvania resident, you will not pay any state income taxes on pension income or Social Security benefits. 

The reciprocity agreement between Ohio and Pennsylvania deals with employee compensation (not pension income). It does not matter if the pension income is paid by a (former) Ohio employer. The applicable state income tax depends on your current state of domicile. 

For more resources, check out PICPA’s Money & Life Tips, Ask a CPA, or CPA Locator.

Answered by: Paula A. Rummell, CPA, is a tax senior manager with H2R CPA in Pittsburgh. 

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