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Can I subtract Wisconsin Retirement Benefits on my Wisconsin return?

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Question
Can I subtract Wisconsin Retirement Benefits on my Wisconsin return?

Answer

Military and Uniformed Services Retirement Benefits You may subtract retirement payments received from:

(1) The U.S. military retirement system (including payments from the Retired Serviceman’s Family Protection Plan or the Survivor Benefit Plan). These retirement benefits are paid from the Defense Finance and Accounting Service.

(2) The U.S. government that relate to service with the Coast Guard, the commissioned corps of the National Oceanic and Atmospheric Administration, or the commissioned corps of the Public Health Service. Your subtraction cannot be more than the amount of such retirement payments that you included in your federal income.

 

Local and State Retirement Benefits You may subtract any payments received from the retirement systems listed below provided:

(1) You were retired from the system before January 1, 1964, or

(2) You were a member of the system as of December 31, 1963, retiring at a later date and payments you receive are from an account established before 1964, or

(3) You are receiving payments from the system as the beneficiary of an individual who met either condition 1 or 2.

Your subtraction cannot be more than the amount of such payments that you included in your federal income.

The specific retirement systems are: Milwaukee City Employees, Milwaukee City Police Officers, Milwaukee Fire Fighters, Milwaukee Public School Teachers, Milwaukee County Employees, Milwaukee Sheriff, and Wisconsin State Teachers retirement systems.

  Do not subtract any of the following: • Payments received as a result of voluntary tax-sheltered annuity deposits in any of the retirement systems listed above. • Payments received from one of the retirement systems listed above if you first became a member after December 31, 1963. This applies even though pre-1964 military service may have been counted as creditable service in computing your retirement benefit.

CAUTION Your retirement benefits may be subtracted only if they are based on qualified membership in one of the retirement systems listed above. Qualified membership is membership that began before January 1, 1964, as explained above. Any portion of your retirement benefit that is based on membership in other retirement systems (or based on employment that began after December 31, 1963) is taxable and may not be subtracted.

Example 1 You were a member of the Wisconsin State Teachers Retirement System as of December 31, 1963. You left teaching after 1963 and withdrew the allowable amount from your retirement account. This closed the account. You later returned to teaching. A new retirement account was then established for you. Retirement benefits from this new account (established after 1963) do not qualify for the exemption.

Example 2 You were employed as a teacher from 1960‑65. During that time you were a member of the Wisconsin State Teachers Retirement System. From 1966 until retirement, you were employed by a state agency (not as a teacher). You were then a member of the Wisconsin Retirement System. You receive an annuity from the Department of Employee Trust Funds. The annuity is based on employment in both retirement systems. Only the portion of the annuity that is due to the Wisconsin State Teachers Retirement System may be subtracted.

You may use the following formula to figure the exempt amount that may be subtracted: Years of creditable service in an exempt plan x Annuity included = Portion of annuity which Total years of creditable service in federal income may be subtracted   You may have received separate Forms 1099-R for the taxable and exempt portions of your annuity. In this case, you may use the Form 1099‑R information instead of the above formula.

Federal Retirement Benefits You may subtract payments received from a federal retirement system provided:

(1) You were retired from the system before January 1, 1964, or

(2) You were a member of the system as of December 31, 1963, retiring at a later date and payments you receive are from an account established before 1964, or

(3) You are receiving payments from the system as the beneficiary of an individual who met either condition 1 or 2.

See “05 Local and State Retirement Benefits” on page 22 for further information. The limitations and examples that apply to local and state retirement benefits also apply to federal retirement benefits.

A “federal retirement system” is a United States government civilian employee retirement system. Examples of such retirement systems include the Civil Service Retirement System and the Federal Employees’ Retirement System. These retirement benefits are paid from the U.S. Office of Personnel Management. Payments from the federal Thrift Savings Plan do not qualify for the subtraction.

Railroad Retirement Benefits, Railroad Unemployment Insurance, and Sickness Benefits Wisconsin does not tax amounts received from the U.S. Railroad Retirement Board. You may subtract railroad retirement benefits included on line 4d of your federal Form 1040 or 1040-SR.

 


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Article Details
Views: 946 Created on: Jun 15, 2013
Date updated: Dec 06, 2019
Posted in: States, Wisconsin

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