Social Security benefits are not taxed in Wisconsin. The state fully exempts every dollar of Social Security income — retirement, survivor, and disability — from its income tax, with no income limits, age requirements, or phase-outs. The exemption is authorized under Wis. Stat. § 71.05(6)(b)9, and you claim it by subtracting the federally taxed portion of your benefits back out when you calculate your Wisconsin income.1Wisconsin Department of Revenue. 2025 Schedule SB Instructions – Subtractions from Income The federal government is a separate story, and Social Security still affects a few Wisconsin programs, so it’s worth knowing where the exemption ends.
How to Claim the Exemption on Your Wisconsin Return
Full-year Wisconsin residents use Schedule SB (Subtractions from Income). On line 4 of Schedule SB, enter the amount from line 6b of your federal Form 1040 or 1040-SR — that’s the taxable portion of your Social Security under federal rules. The Schedule SB total then flows to line 6 of Wisconsin Form 1, which reduces your federal AGI down to your Wisconsin AGI. File Schedule SB with your Form 1.2Wisconsin Department of Revenue. 2025 Schedule SB, Form 1 – Subtractions from Income
Part-year residents and nonresidents file Form 1NPR instead, and the process is even simpler. Wisconsin’s instructions tell you to leave line 14 (Social Security) blank. Because the state doesn’t tax benefits at all, there’s nothing to report and no subtraction to run.3Wisconsin Department of Revenue. 2025 Form 1NPR Instructions – Wisconsin Income Tax for Nonresidents and Part-Year Residents
Which resident category you fall into depends on domicile — your true, fixed, permanent home. You can only have one at a time. The Department of Revenue looks at where you live, where you vote, where your vehicles are registered, and where you own or rent property.4State of Wisconsin Department of Revenue. Legal Residence/Domicile
The IRS Still Taxes Part of Your Benefits
Wisconsin leaves Social Security alone, but the federal government uses a figure called combined income (adjusted gross income plus tax-exempt interest plus half of your Social Security) to decide how much of your benefits are taxable.5Internal Revenue Service. IRS Reminds Taxpayers Their Social Security Benefits May Be Taxable
Two federal thresholds apply based on filing status:
- Single filers: up to 50% of benefits may be taxable at $25,000 to $34,000 of combined income; up to 85% above $34,000.
- Married filing jointly: up to 50% at $32,000 to $44,000; up to 85% above $44,000.
- Married filing separately, if you lived with your spouse at any point in the year: the threshold is $0, so up to 85% of benefits can be taxed from the first dollar. If you lived apart the entire year, the threshold rises to $25,000.6Internal Revenue Service. Social Security Income
Whatever the IRS taxes federally is the amount you’ll subtract back out on Schedule SB.
Social Security Still Counts for the Homestead Credit
This is where retirees sometimes lose money they didn’t expect to lose. The Homestead Credit helps lower-income Wisconsin residents offset property taxes or rent, and its “household income” definition is broader than what appears on your tax return. Social Security is fully included — the tax-exempt portion, amounts deducted for Medicare premiums, any Social Security death benefit, SSI, and Social Security disability payments all get reported on line 9b of Schedule H.7Wisconsin Department of Revenue. Schedule H and H-EZ Wisconsin Homestead Credit Instructions
For the 2025 tax year, household income must be less than $24,680 to qualify, and the maximum credit is $1,168.8Wisconsin Department of Revenue. Homestead Credit Tax Year 2025 Because Social Security counts toward that total, some retirees who owe zero state tax on their benefits are still disqualified from the credit. If you’re near the threshold, that’s worth planning around.
When You Still Need to File a Wisconsin Return
Social Security benefits do not count toward the gross income threshold that triggers a Wisconsin filing requirement.9State of Wisconsin Department of Revenue. Individual Income Tax – Filing Requirements For the 2025 tax year, residents age 65 or older must file if their gross income (excluding Social Security) reaches:
- Single: $14,510
- Married filing jointly, both 65 or older: $27,010
- Married filing separately, 65 or older: $12,880 per spouse
- Head of household, 65 or older: $18,470
If Social Security is your only income, you generally don’t need to file a Wisconsin return. If you also receive pension payments, IRA distributions, investment income, or wages, add those non-Social-Security amounts and compare to the thresholds above.
Other Retirement Income Is Treated Differently
The full exemption is Social Security only. Distributions from traditional IRAs, 401(k) plans, and pensions are generally taxable by Wisconsin to the same extent they’re taxable federally.10Wisconsin Department of Revenue. How Your Retirement Benefits Are Taxed
Under 2025 Wisconsin Act 15, signed July 3, 2025, taxpayers age 67 and older can subtract up to $24,000 of qualifying retirement income from Wisconsin taxable income. Married couples filing jointly where both spouses are at least 67 can subtract up to $48,000. The exclusion is not income-tested. Qualifying income includes distributions from IRAs, 401(k), 403(b), 457, and other qualified plans. Retirees age 65 and 66 can still claim the older exclusion of up to $5,000 ($10,000 joint), but that version requires federal AGI below $15,000 single or $30,000 joint.10Wisconsin Department of Revenue. How Your Retirement Benefits Are Taxed