Updated October 5, 2026. Quick answer: Yes, with a subtraction at 67. Wisconsin’s Publication 126 says an individual at least 67 “may subtract up to $24,000 of qualifying” retirement income ($48,000 for a joint return where both are 67 or older), and qualifying income means a taxable distribution from a qualified retirement plan or IRA.
More state retirement-income schedules, line by line: Wisconsin Schedule SB.
How Wisconsin treats annuity income
| Item | What the documents say |
|---|---|
| Treatment | Taxed; a retirement income subtraction from age 67 for qualified-plan and IRA distributions |
| Subtraction at 67 | “may subtract up to $24,000 of qualifying” retirement income; “may subtract up to $48,000 of qualifying retirement income” for joint filers both 67 or older |
| Age 65 subtraction | A separate $5,000 subtraction at 65 or older if federal adjusted gross income is under $15,000 (single) or $30,000 (married) |
| Annuities | “Tax-sheltered annuity benefits received are included in taxable income.” |
| Rates | The Form 1 instructions compute the tax from a table and worksheets by taxable income; this page prints no single rate |
| Commercial contracts | The documents read do not mention annuity contracts bought outside an employer plan |
A $24,000 example
A single filer 67 or older whose $24,000 is a taxable distribution from a qualified plan or IRA can subtract up to $24,000, so all of it comes out and it adds $0 of Wisconsin tax.
A filer under 67 gets no $24,000 subtraction, so the $24,000 is taxed from the Form 1 table by the filer’s taxable income.
What changes in 2026
The $24,000 and $48,000 subtraction began with the 2025 taxable year; the documents read print no further 2026 change.
Federal rules
The state’s treatment sits on top of the federal one. The IRS explains the federal side in Topic no. 410, Pensions and Annuities and Publication 575, Pension and Annuity Income.
Related: whether Wisconsin taxes pensions, how Wisconsin taxes retirement income, state tax on 401(k) and IRA withdrawals, how a surrendered annuity is taxed, and pension and annuity decisions.
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Answer againSources
- How Your Retirement Benefits Are Taxed, Publication 126 (1/26) (Wisconsin Department of Revenue): https://www.revenue.wi.gov/DOR Publications/pb126.pdf
- 2025 I-111 Form 1 Instructions (Wisconsin Department of Revenue): https://www.revenue.wi.gov/TaxForms2025/2025-Form1-Inst.pdf
Sources: the primary documents linked above, read on October 5, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.