Ohio Tax Strategy: Buckeye State Freedom Planning
Ohio has a progressive income tax up to 3.5% plus local taxes up to 3%. Combined with federal rates, over 43% can go to government. Section 7702 policy loans can stay income-tax-free while the policy stays in force and is not a MEC. Lapse or MEC treatment can make loans taxable. That is not an escape from every federal or state tax. Education only.
The Ohio Tax Challenge
Ohio's state rate of 3.5% seems low, but local income taxes up to 3% add significantly. Combined with federal taxes, the burden is substantial.
✅ The Good News
- State rate capped at 3.5%
- Strong Fortune 500 presence
- Growing Columbus economy
⚠️ The Challenge
- Local income taxes add up to 3% more
- Combined state/local/federal can exceed 43%
- Most cities impose local income tax
Ohio Tax By The Numbers
Section 7702: Your Tax Freedom Solution
Section 7702 of the IRS tax code creates a powerful opportunity: access your retirement funds through policy loans that can stay income-tax-free while the policy stays in force and is not a MEC. Lapse or MEC treatment can make loans taxable. For Ohio residents, that is not an escape from every federal or state tax.
Loan tax treatment
Section 7702 policy loans can stay income-tax-free while the policy stays in force and is not a MEC. Lapse or MEC treatment can make loans taxable. That is not an escape from every federal tax. Education only.
State Tax-Free
No Ohio state income tax on policy loans while the policy stays in force and is not a MEC. Lapse or MEC treatment can make loans taxable. Education only.
Ohio Professionals We Typically Serve
Fortune 500 Executives
Kroger, P&G, and corporate leadership
Cleveland Clinic Professionals
World-class medical specialists
Professional Athletes
Bengals, Browns, Cavaliers, Blue Jackets
Manufacturing Leaders
Industrial business owners and executives
Ohio Areas We Serve
Matt Nye's Recommendation
"Ohio surprises people. The state rate of 3.5% seems reasonable—until you add local income tax. Columbus, Cleveland, Cincinnati—they all add 2-3% more. Suddenly you are looking at 6.5% to the state and city."
"Combined with federal taxes, Fortune 500 executives, Cleveland Clinic surgeons, and business owners lose over 43% of their 401(k) to government."
"Section 7702 is how Buckeyes keep their success. Section 7702 policy loans can stay income-tax-free while the policy stays in force and is not a MEC. Lapse or MEC treatment can make loans taxable. That is not an escape from every federal or state tax. Education only. That is Ohio values—hard work should pay off for you."
— Matt Nye, 20-Year Industry Veteran
Frequently Asked Questions
How does Section 7702 help Ohio residents?
Section 7702 policy loans can stay income-tax-free while the policy stays in force and is not a MEC—unlike Ohio's state plus local taxes (up to 6.5% combined) plus federal taxes. Lapse or MEC treatment can make loans taxable. Education only.
I pay local income tax too. How does that factor in?
Ohio is unique with local income taxes up to 3%. Combined with state and federal, you could pay over 43%. Section 7702 policy loans can stay income-tax-free while the policy stays in force and is not a MEC. Lapse or MEC treatment can make loans taxable. That is not an escape from every federal tax. Education only.
I work for a Fortune 500 company with stock options. Is this relevant?
Very relevant. Stock option exercises are taxed as ordinary income at combined rates. Section 7702 policy loans can stay income-tax-free while the policy stays in force and is not a MEC. Lapse or MEC treatment can make loans taxable. That is not an escape from every federal or state tax. Education only.
Cleveland Clinic professionals have high incomes. How much can we save?
Medical specialists compare large portfolios. Section 7702 policy loans can stay income-tax-free while the policy stays in force and is not a MEC. Lapse or MEC treatment can make loans taxable. That is not an escape from every federal or state tax. Education only.
Ready for Ohio Tax Freedom?
Section 7702 policy loans can stay income-tax-free while the policy stays in force and is not a MEC (lapse/MEC can make loans taxable). That is not an escape from every federal or state tax. Education only. Schedule your free analysis today.
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