There are many reasons for anyone thinking of retirement to consider living in Wisconsin. It’s diverse culture, friendly communities, and varied natural landscapes make it an enticing option for senior citizens.
According to a 2014 survey, it was easier to live in Wisconsin than many other states with large metropolitan populations like Colorado, Pennsylvania, and New York. However, it lagged behind more rural options such as Nebraska, New Mexico, and Idaho.
When deciding where to retire, one of the most pressing concerns for retirees is taxes. Here’s how taxes in Wisconsin will affect your retirement:
1. Income Taxes
Wisconsin’s cost of living falls below the national mean, however its income tax rate does not. In fact, it is substantially higher than average.
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MarketWatch explains, “But personal income taxes here are high (the top rate is 7.75 percent), meaning that this state has the 11th highest personal income tax burden in the nation.” Also, its property taxes are significantly higher than most other states."
2. Pension Benefits
Wisconsin does tax income on a retiree’s pension.
According to the Wisconsin Department of Revenue, “If you are a full-year resident of Wisconsin, generally the same amount of your pension and annuity income that is taxable for federal tax purposes is taxable by Wisconsin.”
3. Social Security Taxes
The good news is that Social Security benefits are not taxed. Only 13 states currently tax Social Security income including Colorado, Connecticut, and Vermont. Fortunately Wisconsin isn’t one of them.
4. Exemptions
Wisconsin allows several taxable exemptions to its retirees, specifically for those who work for state or federal organizations. These include Milwaukee county employees, police officers, fire fighters, and public school teachers.
The Wisconsin Department of Revenue clarifies that retirees of a certain age do not qualify for these exemptions. They agency states, “Payments received from one of the retirement systems listed above if you first became a member after December 31, 1963.”
It also offer a homestead tax exemption, exemptions for retired military personnel, and grants for lower income retirees.
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