Wisconsin retirement taxes at a glance (2026)
| State income tax | Graduated, top rate 7.65%Wisconsin has a graduated income tax from 3.5% to 7.65%; the 4.4% bracket was widened in 2025. |
|---|---|
| Social Security | Not taxedWisconsin does not tax Social Security benefits. |
| Pensions | Partly taxedFrom tax year 2025, each person age 67+ can exclude up to $24,000 of retirement income ($48,000 per couple if both qualify), with no income limit. Claiming it means you cannot claim any Wisconsin credits that year. Exclusion: up to $24,000 (age 67+). |
| 401(k) and IRA withdrawals | Partly taxedIRA and 401(k) withdrawals count toward the $24,000 age-67 exclusion; amounts above it are taxed. |
| Government pensions | Partly taxedSome government pensions are exempt if membership in the system began before 1964; other public pensions are taxed but can use the $24,000 age-67 exclusion. |
| Military retirement pay | Not taxedMilitary and uniformed services retirement benefits are fully exempt. |
| Estate tax | No |
| Inheritance tax | No |
| Property tax help for seniors | The homestead credit helps lower-income homeowners and renters, but it is lost if you claim the $24,000 retirement income exclusion. |
Recent changes and good to know
- 2025 Wisconsin Act 15 (2025-27 budget) created the $24,000 exclusion at age 67 (up from a $5,000 income-tested exclusion at 65) and extended the 4.4% bracket to $50,480 (single) / $67,300 (joint).
- The older $5,000 exclusion for filers 65+ with very low AGI remains as an alternative; you cannot claim both.
How to lower your retirement taxes in Wisconsin
- Mix your income sources. Roth IRA withdrawals are tax-free at the federal level and generally in Wisconsin too, so a Roth conversion before retirement can cut state tax later. Try the Roth conversion calculator.
- Watch federal Medicare costs. Large IRA withdrawals can raise your Medicare premiums. Check the 2026 IRMAA brackets.
- Think about your heirs. See what your IRA will really cost your family with the Family Tax Rate calculator.
- Comparing states? These have no state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming.
Frequently asked questions
Does Wisconsin tax retirement income?
Partly: Wisconsin does not tax Social Security or military retirement, and from 2025 it exempts up to $24,000 per person of other retirement income at age 67+, but income above that is taxed.
Does Wisconsin tax Social Security?
Wisconsin does not tax Social Security benefits.
Does Wisconsin tax pensions?
From tax year 2025, each person age 67+ can exclude up to $24,000 of retirement income ($48,000 per couple if both qualify), with no income limit. Claiming it means you cannot claim any Wisconsin credits that year.
Does Wisconsin tax 401(k) and IRA withdrawals?
IRA and 401(k) withdrawals count toward the $24,000 age-67 exclusion; amounts above it are taxed.
Does Wisconsin tax military retirement pay?
Military and uniformed services retirement benefits are fully exempt.
Sources (last verified 2026)
- Estimated distribution of individual income tax reductions in Motion 44 (2025-27 budget) — Wisconsin Legislative Fiscal Bureau (2025-06-18)
- Wisconsin's Proposed Retirement Income Exclusion Would Shift Tax Burdens to Working Families over Time — Tax Foundation (2025)
- State Individual Income Tax Rates and Brackets, 2026 — Tax Foundation (2026)
- Wisconsin retirement income tax guide — Brevy Care (2026-07-13)
- Does Wisconsin Tax Social Security and Pensions? — Taxstra (2026)
Educational content only, not tax, legal or investment advice. Plans and tax laws change; confirm details with your employer's plan documents or your state revenue department. Smart Financial Lifestyle is not affiliated with any employer named on this site.