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Your Business Advocate: Legislators Propose Tax Free Retirement Income

This week, a bipartisan group of legislators, including Senator Rachael Cabral-Guevara of Appleton, introduced a bill to create retirement income tax exemptions for Wisconsin taxpayers 67 or older. Filers would be exempt from paying taxes on the first $100,000 of annual retirement income, with married filers up to $150,000.

Per a memo released by the Legislative Fiscal Bureau, income taxes would be eliminated for 98% of all taxpayers over the age threshold.

Authors hope this will attract new employees and retain Wisconsin retirees. Neighboring states of Iowa and Illinois already have exemptions like these in place.

The tax exemptions would be for eligible accounts including IRAs, 401(k), 403(b) and pensions in Wisconsin.

In addition to the Republican authors, Representative LaKeisha Myers (D-Milwaukee) and Senator Lena Taylor (D-Milwaukee) support the bill.

After vetoing the vast majority of the tax cut in the state budget, this could be part of a compromise on future tax cut legislation yet this session.