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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13127
Experience:  15years with H & R Block. Divisional leader, Instructor
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My wifes late husband was a school teacher and a member of

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My wife's late husband was a school teacher and a member of the State Teachers Retirement System (Ohio). He died in 1981 and she and her daughter received death benefits (she until she married me in 1983 and her daughter until she was 18). We moved out of state in 1989. We moved back to Ohio in 2002. On July 17, 2012,STRS notified her that they just now were able to locate her and that she was eligible to resume monthly survivor benefits effective October 1,1998 (Per Ohio House Bill 648 of 1998). A lump sum payment was paid to her on 9/1/2012 in the amount of $91,039.96 after deducting $30,074.56 in federal tax. Should this payment of benefits be spread over the years in which they apply or as some kind of income averaging or amended tax feature available? Also What kind of Ohio and local taxes are in play?

Robin D :

Hello and thank you for using Just Answer,

The payments should be reported for the year the payments were made. There would be no averaging allowed or spreading them over years. The taxes withheld will be reported as well and shown on the return. The taxable portion of a retirement benefit payment paid directly are subject to Ohio income tax for Ohio residents. As she was an Ohio resident when the payment was made the amount should be included in Ohio state return also. STRS Ohio retirement benefits are exempt from local or municipal taxes in Ohio.

On request, the state would withhold Ohio income taxes but if no request was made, tax will be due when the Ohio return is filed. Estimated payments should be made now if she wishes to lessen the tax burden at filing.

Robin D :

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