Wealth InFormation: New Tax Benefit for Wisconsin Residents age 67+

"By LouAnn Schulfer, AWMA®, AIF® “The Wealth InFormation Lady”, Accredited Wealth Management AdvisorSM, Accredited Investment Fiduciary® , Published Author" |
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Wealth Management

Wealth is always in formation, and the information that you receive is critical to optimizing your wealth. Take our tax laws for example, in formation and changing once again.  All of the tax news spotlight lately has been on the One Big Beautiful Bill Act newly signed into federal legislation on Independence Day 2025. But for Wisconsinites age 67 and wiser, there’s a tax law so good it deserves its own round of applause.

Cheers to the Badger State, which just made retirement in Wisconsin more tax-friendly. Starting in 2025, residents age 67 and up can exclude a sizeable portion of qualified retirement income from Wisconsin taxable income, making a meaningful difference at nearly every income level.

For residents who are at least age 67, single filers may exclude up to $24,000 of qualified retirement income per year, and if you are married filing joint (and both 67+), that number doubles to $48,000!  The exclusion has no income limitations, phase-outs or caps.  All you have to be is a Wisconsin resident, and even if your residency is for a portion of the year, you may receive a prorated exclusion.

For tax purposes in Wisconsin, qualified retirement income generally includes taxable distributions from retirement accounts like IRAs, 401(k)s, 403(b)s, and private pensions. Retirement income sources such as Social Security benefits and U.S. military pensions are already fully exempt from WI state taxation. 

Some planning implications that we’ll consider with our clients include the management of their retirement income distributions, Roth conversions, and pension timing, as well as withdrawal sequencing. 

Wealth is always in formation, including the new tax benefit for Wisconsin Residents age 67 and up. 

 

LouAnn Schulfer of Schulfer & Associates, LLC Wealth Management can be reached at (715) 343-9600 or louann.schulfer@lpl.com TheWealthInformationLady.com SchulferAndAssociates.com

Securities and advisory services offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC.