Wisconsin retirement income tax (2026)

How Wisconsin taxes retirement income

Wisconsin taxes income in 4 brackets for a married couple filing jointly, from 3.5% to 7.65%; the top rate starts at $431,060 of taxable income^[1].

Before the rate applies, the simulator subtracts a standard deduction of $25,110 on a joint return ($12,555 single) and personal exemptions of $1,400 ($700 single).

Social Security benefits are exempt from Wisconsin income tax: none of the benefit enters the state base, as in 22 of the 24 states covered here that tax income.

From age 67, each person can exclude up to $24,000 a year of IRA, 401(k) and pension distributions, so a couple can exclude up to $48,000 when each spouse has that much. In the worked examples the couple’s distributions are split evenly between the spouses, so each spouse’s cap applies to half.

Long-term capital gains and qualified dividends are taxed as ordinary income, at the same rates.

For single filers the simulator halves the joint deduction and exemption but keeps the joint bracket widths. Where Wisconsin’s real single brackets are narrower, that understates a single filer’s tax.

Put together, the example couple below owes $0 in Wisconsin, the lowest bill among the 24 states covered here that tax income, shared with 7 other states.

2026 brackets

Bracket thresholds are held at these values in every simulated year. The simulator does not index state amounts for inflation.

Worked example

A retired couple, both 67, filing jointly, with $48,000 of Social Security, $40,000 of IRA withdrawals and a $20,000 pension. The figures are computed when the page is built, by the same state-tax function the simulator runs.

The couple’s next $1,000 of IRA withdrawals would add $0 of Wisconsin tax.

A single retiree, 67, with half those amounts ($24,000 of Social Security, $20,000 of IRA withdrawals, a $10,000 pension) owes $0, 0.00% of gross income.

Age matters here: if both spouses were 65, below the exclusion age of 67, the same income would owe $1,297, which is $1,297 more than at 67.

As IRA withdrawals rise

The same couple, with Social Security and the pension unchanged, taking more from their IRAs (a larger withdrawal, a required minimum distribution or a Roth conversion all count as distributions here):

Neighbouring states

The example couple’s state tax in Wisconsin and in the neighbouring states covered here, same income and ages:

Against Wisconsin, the couple would pay more in Minnesota (+$4,013); the same in Illinois, Michigan. With $200,000 of IRA withdrawals instead of $40,000, they would owe $7,182 in Wisconsin, against Minnesota ($15,333), Illinois ($0), Michigan ($3,102).

What this page leaves out

What the simulator does and does not handle for Wisconsin, item by item^[1]:

• 2025 married filing jointly brackets (3.5%–7.65%).
• The $25,110 max married filing jointly standard deduction is modeled flat but really phases to $0 as income rises, which understates tax at high incomes.
• $700/person exemption.
• Social Security exempt.
• New-for-2025 $24,000/person retirement exclusion at 67+ (claiming it forgoes WI credits, which is ignored).
• The 30% net long-term capital gains exclusion is ignored.

In every state the simulator also leaves out credits, itemized deductions, deductions that phase out with income, local income taxes, surtaxes and any deduction for federal tax paid. It holds state amounts fixed and does not index them for inflation.

See it over a full plan

Related

• All 33 states compared
• State taxes in retirement: the exemptions that change the map
• The Social Security tax torpedo
• The RMD bomb: how pre-tax savings become forced income
• Roth ladder: how a Roth conversion ladder works
• Taxes in retirement: the topic guide
• Marginal-rate map (federal and state tax on the next dollar)