State-by-State Guide to Taxes on Retirees - Wisconsin
Tool | November 2018

State-by-State Guide to Taxes on Retirees

Wisconsin

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The Bottom Line
Map 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 your IRAs and 401(k) plans are taxable. The state offers some retirement income exemptions, subject to income limits.

Property taxes are the fifth-highest in the U.S. The median property tax on Wisconsin’s median home value of $165,800 is $3,428.

Some property tax relief program are available to homeowners and renters alike.

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

Generally, the same amount of your pension and annuity income that is taxable for federal tax purposes is taxable by Wisconsin. As with Social Security benefits, Railroad Retirement benefits are not taxed. Certain Wisconsin state and local government retirees (those accounts that were in the system before 1964) qualify for a tax exemption. All retirement payments from the U.S. military employee retirement system, the Coast Guard, the commissioned corps of the National Oceanic and Atmospheric Administration, and the Public Health Service are exempt.

Retired people whose income is less than $10,000 ($19,000 if married filing a joint return) are also eligible for a "working families tax credit." This credit reduces or eliminates the Wisconsin income tax for people, including retirees, who are full-year residents of Wisconsin. You don't have to be employed or have more than one person in your household to claim this credit.

Retirees 65 and older can subtract $5,000 of qualified retirement income, including IRA distributions, from their Wisconsin taxable income -- subject to income restrictions (federal AGI must be less than $15,000 for single filers, $30,000 for married filers even if filing separately). Those age 65 or older at year-end are allowed an additional personal exemption of $700 and a deduction of $250.

IRAs

Qualifies for exemptions.

401(k)s and Other Defined-Contribution Employer Retirement Plans

Qualifies for exemptions.

Private Pensions

Qualifies for exemptions.

Public Pensions

Qualifies for exemptions. Certain Wisconsin state and local government retirees (those accounts that were in the system before 1964) qualify for a tax exemption. All retirement payments from the U.S. military employee retirement system, the Coast Guard, the commissioned corps of the National Oceanic and Atmospheric Administration, and the Public Health Service are exempt. Note, though, that if a pension is fully exempt, a taxpayer cannot also take the retirement exclusion.

Property Taxes

The median property tax on Wisconsin’s median home value of $167,000 is $3,257.

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

None.

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