Wisconsin Retirement Taxes (2026): New $24,000 Exclusion

2026 edition · statute-cited · part of Clear Money Guide’s 51-state retirement tax series. This guide covers state taxes on retirement income and estate transfers; property and sales taxes vary by county and are outside its scope.

Updated July 24, 2026. Quick answer: Wisconsin never taxes Social Security — and as of tax year 2025 it stopped taxing the first $24,000 per person ($48,000 for a qualifying couple) of 401(k), IRA and pension income for taxpayers 67 and older, with no income test. That change (2025 Act 15, signed July 3, 2025) replaced the old $5,000 income-tested subtraction that many national guides still cite. Above the exclusion, income is taxed on a four-bracket schedule from 3.5% to 7.65%. At death: no estate tax, no inheritance tax — and a marital-property rule that can be a genuine federal tax advantage.

The Act 15 correction

2025 Wisconsin Act 15 rewrote the retirement subtraction in Wis. Stat. §71.05(6)(b): taxpayers age 67+ may exclude up to $24,000 each of income from qualified retirement plans and IRAs — $48,000 on a joint return where both spouses qualify — regardless of income (WI DOR Tax Bulletin 230, July 2025). It first applied to tax year 2025 and continues for 2026. Any guide still describing a $5,000 subtraction for 65+ filers with income under $15,000 is describing repealed law. Also fully exempt, as before: military and uniformed-services retirement pay, and pre-1964 Wisconsin teacher/public retirement system benefits.

How Wisconsin taxes retirement income (statute-cited)

Income tax	Graduated, four brackets 3.5% to 7.65% (Act 15 also widened the 4.4% second bracket)
Social Security	Not taxed (fully subtracted)
Pension / 401(k) / IRA	At 67+: exclude up to $24,000/person ($48,000 MFJ), no income test (2025 Act 15); taxable above. Under 67: generally taxable
Military retirement	Fully exempt (Wis. Stat. §71.05(6)(b))
Estate / inheritance tax	None

The marital-property advantage at death

Wisconsin is the only Midwest state on the community-property model: under the Marital Property Act (Wis. Stat. ch. 766), most property acquired during marriage is marital property — and at the first spouse’s death, both halves of marital property can qualify for a full federal cost-basis step-up, not just the decedent’s half as in common-law states. For a couple holding appreciated farmland, a business, or a long-held brokerage account, that can eliminate decades of capital gain for the survivor — a planning fact most retirement-tax guides skip entirely. Probate itself: the personal representative’s commission is statutory at 2% of inventory value less mortgages/liens (Wis. Stat. §857.05(2), or a rate agreed with beneficiaries), attorney fees must be “just and reasonable,” and estates of $50,000 or less can skip probate via transfer by affidavit (Wis. Stat. §867.03, form PR-1831). Context: probate cost by state · small-estate limits by state · will vs. trust calculator.

Is Wisconsin a good state to retire in for taxes?

Meaningfully better than its reputation since Act 15: a 67-year-old couple with Social Security plus $48,000 of retirement-plan withdrawals can owe Wisconsin nothing, where two years ago most of that was taxable. The honest caveats are the 3.5–7.65% brackets on income above the exclusion, and ages 62–66, when withdrawals get no shelter at all. No death taxes plus the marital-property step-up make Wisconsin quietly strong on the estate side.

Wisconsin vs. common alternatives

State	Social Security	Pension / 401(k) / IRA	Estate tax	Inheritance tax
Wisconsin	Not taxed	Exclude up to $24,000/person at 67+ (2025 Act 15)	None	None
Illinois	Not taxed	Not taxed (all retirement income exempt)	Yes — $4M cliff, not indexed	None
Minnesota	Partially taxed (income-tested subtraction)	Fully taxable; public-pension subtraction only	Yes — $3M exclusion, frozen	None
Iowa	Not taxed	Fully exempt at 55+	None	None (repealed 2025)

Comparison rows summarize general rules; see our 51-state retirement tax table for statute-cited detail.

Considering a Roth conversion? The converted amount is taxed as ordinary income in the year you convert, and Wisconsin may treat it differently from the retirement income above — see how all 51 jurisdictions tax Roth conversions.

Finding a financial advisor in Wisconsin

Per the SEC’s July 2026 Investment Adviser roster, Wisconsin has 195 SEC-registered advisory firms (#21 nationally) managing $1.26 trillion (#16 by AUM). Full breakdown: Wisconsin advisor statistics. Reviewing fee structures: fee-drag calculator.

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Thinking about moving?

Four taxes change when you move state in retirement, not one: income tax on withdrawals, state estate tax, state inheritance tax, and what probate costs your heirs. Corridor comparisons involving Wisconsin:

Leaving Wisconsin? See leaving Wisconsin in retirement.

Compare any two states with the retirement tax comparison tool, or browse all corridors at the relocation hub.

What probate costs in Wisconsin

Wisconsin uses a hybrid standard — a statutory ceiling or floor with reasonableness applied inside it — so the fee has a bound but not a fixed number. Whether its small-estate route of $50,000 reaches real property is not clearly stated in the statute, so treat that as unresolved rather than permission. Full detail with the governing statute, the court filing fee and the threshold: Wisconsin probate cost. To price a specific estate, use the probate cost calculator.

Cite or share this guide

Suggested citation: Clear Money Guide, “Wisconsin Retirement Taxes (2026 edition),” statute-cited; clearmoneyguide.com/wisconsin-retirement-taxes/. Free to cite with attribution and a link. Data verified July 23–24, 2026 against state statutes, session laws, and revenue-department guidance.

Wisconsin Retirement Taxes (2026): The New $24,000 Exclusion Most Guides Still Miss