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

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 does not tax Social Security benefits — 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) added a new subtraction on top of the older $5,000 income-tested subtraction, which now matters only at ages 65 and 66. 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.

More state retirement-income schedules, line by line: Wisconsin Schedule SB.

Inherited an IRA? What the state’s own documents say about taxing those withdrawals: Wisconsin tax on inherited IRA withdrawals.

Hold a 403(b) or 457(b)? What the state’s own documents say about taxing those withdrawals: does Wisconsin tax 403(b) and 457(b) withdrawals.

Drawing a pension? Whether the state withholds tax from it, from its own documents: Wisconsin tax withholding on pension payments.

Selling your home? How the state taxes the profit, from its own tax documents: Does Wisconsin tax the profit from selling your home?.

For a pension earned elsewhere or paid after you move: does Wisconsin tax out-of-state pensions.

Withdrawing from an IRA or 401(k)? Whether the state withholds tax from it, from its own documents: Wisconsin tax withholding on IRA and 401(k) withdrawals.

Taking money out of your TSP? How the state taxes it, from its own tax documents: Does Wisconsin tax TSP withdrawals?.

Before the tax question, the Milwaukee city employees’ pension options and refund rules, from the system’s own handbooks: Milwaukee ERS retirement decisions.

For trust income specifically: does Wisconsin tax trust income.

For dividends and interest specifically: does Wisconsin tax dividends and interest.

Inheriting from, or planning for, someone in this state? Whether the state has an inheritance tax, from its own tax documents: Does Wisconsin have an inheritance tax?.

Contributing to an HSA? How the state taxes it, from its own tax documents: Does Wisconsin tax HSA contributions?.

Making a gift or planning an estate? The state’s gift tax answer, from its own tax documents: Does Wisconsin have a gift tax?.

For annuity payments specifically: does Wisconsin tax annuity income.

Planning for what you leave behind? The state’s estate tax answer, from its own tax documents: Does Wisconsin have an estate tax?.

Estimate a Wisconsin Retirement System benefit from age, service and final average earnings: WRS retirement calculator.

For military retired pay: does Wisconsin tax military retirement.

Saving for a child’s college? The state’s 529 break has its own page: Wisconsin 529 plan tax deduction.

For the sale of stocks, funds or real estate: does Wisconsin tax capital gains.

For 401(k) and IRA withdrawals specifically: does Wisconsin tax 401(k) and IRA withdrawals.

The state’s income tax schedule: the Wisconsin 2026 tax brackets (pending).

The Act 15 correction

Related guides: State tax on 401(k) and IRA withdrawals, State withholding on retirement withdrawals and State tax on military retirement pay.

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. The older $5,000 subtraction for filers 65 and older with federal adjusted gross income under $15,000 ($30,000 on a joint return) remains in §71.05(6)(b)54. for ages 65 and 66, but a filer who claims the new 67+ subtraction may not also claim any credit listed under §71.07 for that year (§71.05(6)(b)54m.d.). Also fully exempt, as before: military and uniformed-services retirement pay, and payments from the federal civil service retirement system, the Wisconsin state teachers retirement system and certain Milwaukee retirement systems that are paid on the account of a person who was a member, or was retired, as of December 31, 1963 (tax sheltered annuity benefits are not exempt under that rule).

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. Ages 65 and 66: the older $5,000 subtraction only if federal AGI is under $15,000 ($30,000 joint); otherwise generally taxable
Military retirement	Fully exempt (Wis. Stat. §71.05(1)(am) and (an))
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, subject to court approval, is computed on the inventory value of the property less any mortgages or liens, plus net principal gains, at 2 percent or at a rate agreed to in writing by the decedent and the personal representative, or by the persons who receive the majority interest in the estate and the personal representative, with further sums allowed in cases of unusual difficulty or extraordinary services as the court determines reasonable (Wis. Stat. §857.05(2)). An attorney performing services for the estate is entitled to “just and reasonable compensation” (Wis. Stat. §851.40(1)). When the decedent leaves property subject to administration in Wisconsin that does not exceed $50,000 in gross value, an heir, the trustee of a revocable trust, a person named in the will as personal representative, or the decedent’s guardian may collect it by transfer by affidavit (Wis. Stat. §867.03(1g)); the transfer-by-affidavit form is now maintained by the State Bar of Wisconsin. 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 to 64, when withdrawals get no shelter at all (ages 65 and 66 get only the $5,000 income-tested subtraction). 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)	Taxable, with a subtraction for qualified public pension income (up to $12,500, or $25,000 joint, reduced at higher incomes) and one for federal military retirement pay	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.

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:

• Wisconsin to Arizona retirement taxes
• Wisconsin to Florida retirement taxes
• Wisconsin to Georgia retirement taxes
• Wisconsin to Tennessee retirement taxes

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 sets the personal representative’s commission at 2 percent of inventory value less mortgages and liens, or a rate agreed in writing, plus further sums the court finds reasonable for unusual difficulty or extraordinary services, all subject to court approval (Wis. Stat. §857.05(2)), and entitles attorneys to just and reasonable compensation (Wis. Stat. §851.40(1)), so the fee is not a fixed number. The $50,000 small-estate route under Wis. Stat. §867.03 cannot be used by a person named in the will as personal representative to receive real property unless that person is also an heir, the trustee of a revocable trust created by the decedent, or the decedent’s guardian (§867.03(1h)). If the affidavit describes an interest in real property, notice to the heirs is due at least 30 days before the affidavit is submitted to the register of deeds, and the recorded affidavit constitutes the transfer (§867.03(1p), (2m)). 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.

Figures verified against Wis. Stat. §§71.05, 71.06, 857.05 and 867.03 (docs.legis.wisconsin.gov), Wisconsin Tax Bulletin 230 and the 2025 Wisconsin Act 15 record on September 30, 2026; the Illinois, Minnesota and Iowa comparison rows (Tax Foundation estate table only), the estate-tax and inheritance-tax statements, the marital-property step-up discussion, the court filing fee and the SEC adviser roster figures were not re-checked.

Primary sources

• https://www.revenue.wi.gov/WisconsinTaxBulletin/230-07-31-WTB.pdf
• https://www.revenue.wi.gov/DOR%20Publications/pb106.pdf
• https://www.wipfli.com/insights/articles/important-tax-changes-in-wisconsin-senate-bill-45
• https://taxfoundation.org/data/all/state/estate-inheritance-taxes/
• https://docs.legis.wisconsin.gov/statutes/statutes/857/05
• https://www.wicourts.gov/forms/PR-1831.PDF
• https://docs.legis.wisconsin.gov/statutes/statutes/814/ii/66/1/b/2