Updated October 29, 2026. Quick answer: Mostly taxable. Publication 126 says of the exemption: “Only payments from the federal Civil Service Retirement System (CSRS) may qualify.” Benefits “paid from an account established after December 31, 1963” do not qualify, though a filer 67 or older may subtract up to $24,000 of qualifying retirement income.
What Wisconsin does with a FERS or CSRS annuity
| Question | What the Wisconsin documents say |
|---|---|
| What the source says | Wisconsin exempts payments from the federal Civil Service Retirement System only when they are paid on an account of someone who was a CSRS member or retiree as of December 31, 1963, so a CSRS annuity from a later account is taxable. |
| Amount or limit | Exempt only if the CSRS account was established before 1964 (full exemption, with a years-of-service share if only part of the service qualifies); otherwise nothing is printed for federal civil service pensions apart from the general retirement subtraction of up to $24,000 (up to $48,000 on a joint return if both spouses qualify). |
| Age or other test | The general subtraction requires age 67 or older before the close of the 2025 tax year; the CSRS exemption for accounts established before 1964 has no age test. |
| Change for 2026 | No 2026 change is printed in the state documents cited here. |
In the Wisconsin documents’ own words
- “Thrift Savings Plan are tax-sheltered annuity benefits and are taxable by Wisconsin” (Publication 126, How Your Retirement Benefits Are Taxed (1/26))
- “may subtract up to $24,000 of qualifying retirement income received” (Publication 126, How Your Retirement Benefits Are Taxed (1/26))
- “All payments received from the U.S. civil service retirement system” (Wis. Stat. 71.05 Income computation)
- “who was a member of the paying or predecessor system” (Wis. Stat. 71.05 Income computation)
How this differs from other pensions in Wisconsin
Wisconsin generally taxes what is taxable on the federal return, and the federal civil service rule is a narrow exemption for membership before 1964 rather than a broad one. Taxable qualified retirement plan and IRA distributions can use the age 67 subtraction, which does not apply to income excluded under another provision of law. See also Does Wisconsin tax pensions? and military retirement pay.
FERS, CSRS and your TSP
Publication 126 says distributions from the Thrift Savings Plan are tax-sheltered annuity benefits and are taxable by Wisconsin. For the Thrift Savings Plan itself, see Does Wisconsin tax TSP withdrawals? and the TSP calculator.
Where this rule sits on the Wisconsin return
Wisconsin generally taxes what is taxable on the federal return. The CSRS exemption for accounts established before 1964 comes from Wis. Stat. 71.05, and the Form 1 instructions list federal retirement benefits as a Schedule SB subtraction.
Checks before you rely on this answer
- Find the date your CSRS account was established, because the exemption turns on membership as of December 31, 1963 and not on when you retired.
- If only part of your service qualifies, expect a years of service share of the benefit rather than all or nothing.
- Check your age before the close of 2025 against the age 67 test for the general $24,000 subtraction.
What the Wisconsin documents leave open
The documents cited here mention only CSRS and never name FERS, so how a FERS basic annuity is treated rests on the general rule, not a printed sentence. The Schedule SB detail, the rate schedule and any 2026 change were not read.
Common mistakes
- Assuming every CSRS annuity is exempt. Only benefits from an account established before 1964 qualify, and military service counted toward the annuity does not establish membership.
- Claiming the $24,000 subtraction before 67. The instructions require age 67 or older before the close of the 2025 tax year.
Related: Does Wisconsin tax pensions?, Wisconsin military retirement pay, Wisconsin retirement deduction line by line, and FERS, TSP and Social Security sequencing.
Find the right next step for your situation
About how much do you have invested? Pick the range that fits; your next step appears immediately below.
Compare adviser services and total fees
For U.S. investors with $250,000 or more in investable assets. WiserAdvisor is an independent service matching you with 2 to 3 vetted advisers. Its form asks for your ZIP code and answers to a few questions; a match is not guaranteed.
Free to request, with no obligation to hire. By submitting, you consent to calls, texts and emails from WiserAdvisor and up to three advisers. Advisers pay for introductions.
Clear Money Guide may earn a referral payment for a qualifying completed form. An introduction is not a Clear Money Guide recommendation.
Opens on WiserAdvisor’s site in a new tab.
Explore optional adviser matching
Considering financial advice? Request an adviser introduction with no obligation to hire.
The form is run by Kapitalwise, our advisor-matching partner. Requesting an introduction is free. Submitting the form shares your contact details with advisers, so expect calls and texts. Advisers pay for introductions. Clear Money Guide may earn a referral payment for a qualifying submitted form, whether or not you hire anyone. A match is not guaranteed.
The Kapitalwise form opens here; you stay on this page.
What happens when you press the button
It asks about nine questions: age, investable assets, location; then your name, email and phone number, and verifies the phone by text. Nothing loads and nothing reaches Kapitalwise until you press the button.
Prefer flat-fee or hourly pricing instead? Compare ranges here.
Answer againSources
- Publication 126, How Your Retirement Benefits Are Taxed (1/26): https://www.revenue.wi.gov/DOR%20Publications/pb126.pdf
- Wis. Stat. 71.05 Income computation: https://docs.legis.wisconsin.gov/statutes/statutes/71/i/05/1
- 2025 Form 1 Instructions: https://www.revenue.wi.gov/TaxForms2025/2025-Form1-Inst.pdf
Read from the state documents linked above on October 29, 2026. General information, not tax advice.