What Is Wisconsin State Tax on 401k Withdrawal? Free Calculator & Rates
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Wisconsin generally taxes traditional 401(k) withdrawals as income.
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Age 67 or older? You may subtract up to $24,000 of qualifying retirement income.
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Married and both 67 or older? You may subtract up to $48,000.
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The $24,000 subtraction has no overall income limit.
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Low income retirees age 65 or older may qualify for a $5,000 subtraction.
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Claiming the $24,000 subtraction means giving up Wisconsin income tax credits.
Wisconsin taxes taxable 401(k) distributions as income for state tax purposes.
The taxable distribution is included in Wisconsin income for the year it is received.
Wisconsin provides specific exclusions and subtractions that can reduce taxable retirement income for eligible taxpayers.
Wisconsin State Income Tax Calculator
Which States Don’t Tax 401k Withdrawals?
See which states exempt 401(k) withdrawals from state income tax, plus states with partial exemptions.
See Tax-Free StatesHow Does Wisconsin Tax 401(k) Withdrawals?
If you live in Wisconsin, 401(k) withdrawals are generally subject to Wisconsin state income tax, just as they are generally taxable federally.
Wisconsin does not have a special low tax rate for ordinary 401(k) withdrawals. So, the withdrawal is generally included in your taxable income.
Wisconsin Retirement Tax Rules: 2025–2026
Wisconsin made a major change to how retirement income is taxed, giving many older taxpayers a new opportunity to reduce their state taxable income.
| 2025–2026 Tax Fact | What It Means |
|---|---|
| New Retirement-Income Break | Up to $24,000 of eligible retirement income can be subtracted. |
| Age 67+ | You must be 67 or older by the end of the tax year. |
| Married, Both 67+ | Up to $48,000 can be subtracted. |
| 401(k) & IRA Income | Certain distributions from 401(k)s, IRAs, and other qualified plans may qualify. |
| First Available | 2025 tax year. |
| Separate Senior Break | Up to $5,000 for some people 65+ with sufficiently low income. |
| Wisconsin Tax Rates (2026) | 3.5% to 7.65%. |
| Large 401(k) Withdrawal | May push some income into a higher tax bracket. |
For Wisconsin retirees age 67 and older, the new retirement-income subtraction can make a meaningful difference, especially for those taking larger 401(k) or IRA withdrawals.
But Wisconsin’s regular tax brackets still apply to income that remains taxable.
The remaining taxable amount would then be subject to Wisconsin’s normal income-tax brackets, assuming you meet all applicable requirements.
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What Is the Wisconsin Tax Rate on a 401(k) Withdrawal?
Wisconsin does not have one flat tax rate for a 401(k) withdrawal.
A taxable 401(k) withdrawal is generally added to your Wisconsin taxable income and taxed at your marginal Wisconsin income-tax rate, which ranges from 3.5% to 7.65%.
| Filing Status | Wisconsin Taxable Income | Marginal Tax Rate |
|---|---|---|
|
Single / Head of Household
|
$0–$15,110 | 3.50% |
| $15,110–$51,950 | 4.40% | |
| $51,950–$332,720 | 5.30% | |
| Over $332,720 | 7.65% | |
|
Married Filing Jointly
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$0–$20,150 | 3.50% |
| $20,150–$69,260 | 4.40% | |
| $69,260–$443,630 | 5.30% | |
| Over $443,630 | 7.65% | |
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Married Filing Separately
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$0–$10,080 | 3.50% |
| $10,080–$34,630 | 4.40% | |
| $34,630–$221,820 | 5.30% | |
| Over $221,820 | 7.65% |
Important: These are marginal rates, not the percentage applied to your entire 401(k) withdrawal.
How Much Tax Will You Pay on a 401(k) Withdrawal?
The amount of tax you pay on a 401(k) withdrawal depends on your
- Total taxable income
- Filing status
- Age, and
- Whether the withdrawal is from a traditional or Roth 401(k).
| Your Situation | Regular Income Tax? | Extra 10% Tax? |
|---|---|---|
| Under 59½ |
Usually Yes
|
Usually Yes
|
| Age 59½ or Older |
Usually Yes
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No
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| Age 55+ and Left Your Job |
Usually Yes
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Usually No*
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| Roll Over to Another 401(k) or IRA |
Usually No
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No
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| Roth 401(k) — Qualified Withdrawal |
No
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No
|
Traditional 401(k)
For a traditional 401(k), withdrawals are generally treated as ordinary taxable income.
There isn't a special flat 401(k) tax rate. The withdrawal is added to your other taxable income and taxed according to your federal income-tax bracket.
Roth 401(k)
Qualified Roth 401(k) withdrawals can be tax-free, including earnings.
But your nonqualified withdrawals can have different tax treatment.
If you're 59½ or older
The 10% early-withdrawal tax generally no longer applies, but traditional 401(k) withdrawals can still be subject to ordinary income tax.
401(k) Early Withdrawal
How Much Will You Lose With an Early 401(k) Withdrawal?
Estimate your potential 10% early-withdrawal penalty, federal and state taxes, and how much cash you could actually keep from your 401(k).
Calculate Your 401(k) CostWisconsin's $24,000 Retirement Income Subtraction
Yes, Wisconsin has a new retirement-income subtraction of up to $24,000, first available for the 2025 tax year.
Who Qualifies?
- Wisconsin residents age 67 or older
- Retirees with qualifying retirement income
- Single filers who meet the age and income requirements
- Married couples filing jointly when both spouses are 67 or older
- Eligible couples who may claim up to $48,000 combined
- Qualifying part-year Wisconsin residents
- Taxpayers receiving eligible distributions from retirement plans or IRAs
Is there any Catch?
If you claim the $24,000/$48,000 retirement subtraction, you generally cannot claim Wisconsin individual income-tax credits for that tax year.
That includes credits that might otherwise be available and even prevents using certain carried-forward credits in that year.
Does Wisconsin Tax 401(k) Withdrawals for Nonresidents?
No, if you are a nonresident of Wisconsin when you take a distribution from a qualified 401(k), Wisconsin does not tax that distribution, even if the 401(k) is connected to employment you performed in Wisconsin.
Suppose you:
- Worked in Wisconsin and contributed to a 401(k)
- Later moved permanently to Florida
- Took a $100,000 lump-sum distribution from that 401(k) after becoming a Florida resident
Wisconsin generally would not tax the $100,000 distribution.
How to Reduce Wisconsin Taxes on a 401(k) Withdrawal?
Wisconsin will tax traditional 401(k) withdrawals as income, but several strategies may also reduce your state tax bill.
Use the $24,000 Retirement Subtraction
If you're 67 or older, you may subtract up to $24,000 of qualifying retirement income from Wisconsin taxable income. A married couple filing jointly may qualify for up to $48,000 if both spouses meet the age requirement.Consider the $5,000 Subtraction
Taxpayers 65 or older may qualify for a separate $5,000 subtraction, but strict federal AGI limits apply.Spread Out Large Withdrawals
Taking a large 401(k) distribution over several years may help keep your taxable income, and potentially your marginal tax rate, lower.Time Withdrawals Around Residency
Qualified-plan distributions received while you're a Wisconsin nonresident generally aren't taxable by Wisconsin, even when the benefits relate to Wisconsin employment.Compare the Retirement Subtraction with Tax Credits
The $24,000 subtraction comes with a trade-off: claiming it means you generally can't claim Wisconsin income-tax credits for that year. So, you need to compare both options before filing.Wisconsin State Tax on 401(k) Withdrawals FAQs
Yes, Wisconsin taxes taxable 401(k) withdrawals as income for Wisconsin residents.
No. Wisconsin generally taxes a taxable 401(k) withdrawal as income rather than applying a separate 401(k) tax.
Sometimes. Certain retirement income is exempt from Wisconsin tax, and eligible taxpayers may qualify for a retirement-income subtraction.
Yes. Starting in 2025, eligible taxpayers age 67 or older can subtract up to $24,000 of qualifying retirement income. A married couple filing jointly may qualify for up to $48,000 if both spouses meet the age requirement.
It can be. You may owe federal income tax and the 10% federal early-withdrawal penalty, depending on the circumstances. Wisconsin generally taxes the taxable portion as income.
Not necessarily. Wisconsin withholding may not apply to every retirement distribution, so you may need to make estimated tax payments if too little tax is withheld.
It depends on your total income, filing status, deductions, and applicable retirement-income exclusions or subtractions. There is no single Wisconsin tax rate for 401(k) withdrawals.
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