State-by-State Guide to Taxes on Retirees
Tool | November 2019

State-by-State Guide to Taxes on Retirees


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The Bottom Line
Flag of Wisconsin

Least Tax-Friendly

The Badger State exempts Social Security benefits from state taxes, but income from pensions and annuities, along with distributions from IRAs and 401(k) plans, are generally taxable. However, retirees who are 65 and older can subtract up to $5,000 of retirement income (including distributions from IRAs) from Wisconsin taxable income if their federal adjusted gross income is less than $15,000 ($30,000 for a married couple filing jointly).

Property taxes are the sixth-highest in the U.S. Plus, there are no special provisions that reduce property taxes for retirees (although tax-deferral loans are available for seniors with incomes under $20,000).

There are some bright spots for retirees. For example, sales taxes are actually low in Wisconsin. It has the eight-lowest combined average state and local tax rate in the nation. There are no estate or inheritance taxes, either.

State Sales Tax

5% state levy. Municipalities can add up to 1.75% to that, but in most locations the local rate is 0.5%, with the average combined rate at 5.44%, according to the Tax Foundation.

Income Tax Range

Low: 4.0% (on up to $11,450 of taxable income for singles or up to $15,270 for married couples)

High: 7.65% (on taxable income over $252,150 for singles or over $336,200 for married couples)

Social Security

Benefits are not taxed.

Exemptions for Other Retirement Income

Income from federal government and designated Wisconsin state and local government retirement plans is exempt if the taxpayer was a member of the plan before 1964.

In addition, taxpayers age 65 and older with federal adjusted gross income of $15,000 or less ($30,000 or less for joint filers) can exclude up to $5,000 of federally-taxed income from private or government retirement plans (other than income otherwise excluded).

Military pensions (including for certain service with the Coast Guard, National Oceanic and Atmospheric Administration, and Public Health Service) and Railroad Retirement benefits are fully exempt.

Property Taxes

In Wisconsin, residents pay an average of $1,924 in taxes per $100,000 of assessed home value.

Tax breaks for seniors: There are no special tax breaks for seniors, but the Wisconsin Housing and Economic Development Authority provides property-tax-deferral loans for the elderly with incomes under $20,000.

Vehicle Taxes

Sales tax is charged at the rate set by the county where the purchaser resides.

Inheritance and Estate Taxes