2025 WI Retirement Income Subtraction credit

[KGHWI]

I filed my federal and state income taxes via TurboTax online version (have for years) and this year I discovered after filing that I did not get the new income credit as expected. I attempted to amend my state return but have not been successful after several hours, two dropped calls and discussions from online specialists, experts and IT personnel at TurboTax.  The last "tax expert" I spoke with before connection was dropped got me to the spot where I needed to fill in the pertinent data to receive the credit but it was not changing the amount of state tax owed which seemed to perplex the "expert" and then got communication dropped.  I gave up for the day and continued to research on the internet and talk to friends who use TurboTax and see how they did it but they were not helpful since it worked just fine for them but may have processed their returns after there were known issues with this new income subtraction in TurboTax. I believe it was finally resolved on February 22, 2026.  I wondered if perhaps the software was working properly and not giving me the credit given my specific situation that doesn't seem to be addressed in any of the TurboTax web posts or TurboTax help. Either that or I'm just not entering it correctly in TurboTax even with the "expert"s help. My situation is that I am not 67 but my wife is.  I have qualified retirement income > $48,000, my wife has none. I know that if we were both 67 that I could claim the entire $48,000 regardless of whether my wife has qualified retirement or not--the documentation says so.  But it doesn't address whether she being 67 can claim the $24,000 for herself based on MY qualified retirement income.  If she can't then that could explain why even though I believe I've entered all the data correctly in the right place(s) in TurboTax that it didn't change the state tax owed. In other words, it looked at my data and determined she doesn't qualify for the credit. I'm looking for someone to weigh in on the above and determine whether she doesn't qualify or the system isn't working properly (for whatever reason).

[WI 1]

TT - at least the downloaded version -- still has glitches with WI Retirement Income Subtraction as of 3/1/26. My current thinking is that, in your case,  your spouse is NOT eligible for any Subtraction, as the 1099-Rs are not issued to her (the 67+ person).  Part of that belief is how TT is asking the questions in Easy Step. I do think the language in the WI publications below is not crystal clear on that though. [I'm similarly under 67 with $40,000+ Retirement Income with over 67 spouse. I'll be holding off on filing WI return for a while until this is fixed in TT or further clarified. Let us know if you find out otherwise!!]

From Form SB instructions: https://www.revenue.wi.gov/TaxForms2025/2025-ScheduleSB-Inst.pdf

Line 16 – Retirement Income Subtraction (Credits Restricted)

If you (or your spouse if married and filing a joint return) were at least 67 years old as of December 31, 2025, you may subtract retirement income from a qualified retirement plan or individual retirement account (IRA) that is federally taxable and has not been removed from Wisconsin income on lines 12 through 15 of this schedule. Individuals may subtract up to $24,000 of retirement income received. A married couple who file a joint return and are both as least 67 years old as of December 31, 2025, may subtract up to $48,000 of retirement income, regardless of how much retirement income each spouse received.

From Pub 106, Tax Information for Seniors: https://www.revenue.wi.gov/DOR%20Publications/pb106.pdf

Retirement Income Subtraction

Wisconsin has two potential subtractions for taxable distributions from qualified retirement plans and individual

retirement accounts.

1) Up to $24,000 ($48,000 for certain joint filers) of qualified retirement income may be subtracted from

Wisconsin income if you (or your spouse if married filing joint return) were age 67 or older on December

31, 2025. Taxpayers claiming this subtraction on their 2025 Wisconsin income tax return may not claim any

Wisconsin income tax credit in computing their refund or balance due for the year.

[WI 1 · Accepted solution]

If one spouse is over 67, and one under 67, it looks like WI Retirement Income Subtraction is limited to over 67 spouse's retirement income, up to $24,000. As of 2/26 update, TT is not dealing with this correctly.

From WI DOR

https://www.revenue.wi.gov/Pages/TaxPro/2026/TaxPractitonerFall2025QandA.aspx#:~:text=Stats.%2C%20pr...

1. If one spouse of a married couple is not age 67, can the married couple still get up to $48,000 subtraction for the new retirement income subtraction?

   No, sec. 71.05(6)(b)54m., Wis. Stats., provides that both spouses must be at least 67 years of age before the close of the taxable year (and file a joint return) to claim a subtraction up to $48,000. The married couple would be limited to a subtraction up to $24,000 based solely on the qualified retirement income received by the spouse that is at least 67 years of age before the close of the taxable year. [emphases added]

[WI 1]

After update, I had to delete and reimport a 1099-R that TT was not recognizing correctly. Shame on TT that I had to double-check WI SB form entry to find out that it was incorrect.

[DianeW777]

Please clarify if this action provided the accurate Wisconsin (WI) qualified retirement income deduction. It's always necessary to check, and verify if the numbers on your tax return seem appropriate. Thank you for your update.

@WI 1 

[WI 1]

TT did not enter proper numbers for Line 16 from my entered 1099-Rs. I had to go to the Retire Wks Form, double click on various boxes, enter numbers in various places until the correct amounts were reported on Line 16.  Was a trial and error fix. The Qualified Ret Income Smartsheet was pretty dumb, iirc. Haven't checked since I filed to see if it's correct now (3/10/26)