Legislators from Northeast Wisconsin introduced a bill that would exempt some retirement income from state taxes.
Rep. David Steffen (Howard) and Rachael Cabral-Guevara (Appleton) are circulating a bill that would exempt the first $100,000 of retirement income for individuals 67 or older and the first $150l,000 for married joint filers.
Wisconsin already exempts Social Security and military earnings from income tax, the bill would add income from 401(k) plans and pensions. In addition, the existing exemptions would not count toward the tax-sheltered income.
The Legislative Fiscal Bureau estimated that such an exemption would almost entirely eliminate the state income tax for retirees.
“By keeping these retirees in Wisconsin, we will see an economic benefit,” Cabral-Guevara said. She pointed out that income and savings determine how much people spend on housing, restaurants and throughout their communities.
Nine states do not tax income at all and four others do not tax retirement income.
“The bottom line is we know the value retirees bring to our families, communities and economy,”: Steffen said.
