Military Retirement in Wisconsin
Complete 2026 Tax Guide for Veterans
100% Tax-Free Military Retirement
Full exemption - no income limits!
Quick Facts: Wisconsin for Military Retirees
Wisconsin Military Retirement Tax Overview
How Wisconsin Taxes Military Retirement (2026)
100% Tax-Free!
Wisconsin exempts ALL military retirement pay from state income tax. There is no income limit, no age requirement, and no cap on the exemption amount. This makes Wisconsin one of the most tax-friendly states in the Midwest for military retirees.
This exemption applies to all military retirement income regardless of branch, years of service, or retirement date. It includes traditional active-duty retirement, Reserve/Guard retirement, and Survivor Benefit Plan (SBP) payments.
What's Exempt
- - All military retirement pay (100%)
- - Survivor Benefit Plan (SBP) payments
- - VA disability compensation (federal law)
- - Combat-Related Special Compensation (CRSC)
Still Taxable
- - Civilian employment income (3.54% - 7.65%)
- - TSP/401k withdrawals (taxable)
- - Social Security (exempt at state level!)
- - IRA distributions (taxable)
2026 Tax Savings Example
An O-4 with 22 years receiving $4,700/month ($56,400/year) in military retirement saves approximately $3,100/year in state taxes compared to fully taxable states. Plus, Social Security is also tax-free in Wisconsin!
Wisconsin Veteran Property Tax Benefits
Veterans and Surviving Spouses Property Tax Credit
Wisconsin provides property tax credits for eligible veterans. The base credit is $400 for veterans who served during designated wartime periods.
100% Disabled Veteran Exemption
Veterans with 100% service-connected disability (or unemployability rating) may be eligible for full property tax exemption on their primary residence.
Primary Residence Credit
The Wisconsin WDVA offers personal loan programs and emergency assistance that can help with property-related expenses for qualifying veterans.
Homestead Credit
Available to all Wisconsin residents (including veterans) with income below certain thresholds. Can provide significant property tax relief for lower-income retirees.
Military Installations in Wisconsin
Fort McCoy
Sparta, Western Wisconsin
- - Major Army training installation
- - 60,000+ acres for training
- - Total Force Training Center
- - Year-round operations
- - 6,000+ employees (military/civilian)
Truax Field (Madison)
Madison, South-Central Wisconsin
- - 115th Fighter Wing (ANG)
- - F-35A Lightning II (arriving 2024-2026)
- - Growing mission capabilities
- - Co-located with Dane County Airport
Volk Field CRTC
Camp Douglas, Central Wisconsin
- - Combat Readiness Training Center
- - Air-to-ground training range
- - National Guard training hub
- - Joint military exercises
General Mitchell ANG Base
Milwaukee, Southeast Wisconsin
- - 128th Air Refueling Wing
- - KC-135 Stratotanker operations
- - Co-located with Mitchell International
- - Reserve/Guard employment opportunities
Wisconsin Cost of Living for Retirees
Cost Breakdown
- Overall Cost of Living 5% below average
- Median Home Price $270,000
- Property Tax Rate 1.68% average
- Sales Tax 5% + 0.5% local
- Average Rent (2BR) $1,150/month
Regional Variations
- Milwaukee Metro: Largest city, affordable urban living
- Madison: Higher costs, excellent quality of life
- La Crosse/Sparta: Near Fort McCoy, very affordable
- Green Bay: Affordable, strong community
- Northern Wisconsin: Very affordable, outdoor paradise
Education Benefits for Wisconsin Veterans
Wisconsin GI Bill
Provides up to 8 semesters (128 credits) of free tuition at any UW System school for qualifying veterans. One of the most generous state GI Bills in the nation.
National Guard Tuition Grant
Wisconsin National Guard members receive 100% tuition reimbursement at state colleges and universities while serving, stackable with federal benefits.
In-State Tuition for Veterans
All veterans qualify for in-state tuition at Wisconsin public colleges under the Veterans Choice Act, regardless of previous residency status.
WDVA Veteran Personal Loans
The Wisconsin Department of Veterans Affairs offers low-interest personal loans that can be used for education expenses.
VetEd Program
State program helping veterans transition to civilian careers through education and job training, with counseling and support services.
Best Wisconsin Cities for Military Retirees
1. Madison
State capital, excellent quality of life, F-35 base
2. Sparta/La Crosse Area
Near Fort McCoy, very affordable, scenic bluffs
3. Milwaukee Metro
Largest city, VA hospital, ANG base, job market
4. Green Bay
Affordable, strong community, growing economy
VA Healthcare in Wisconsin
VA Medical Centers
- Clement J. Zablocki VAMC - Milwaukee
- William S. Middleton Memorial VAMC - Madison
- Tomah VAMC - Tomah (near Fort McCoy)
Community-Based Clinics
20+ CBOCs throughout Wisconsin including:
- - Green Bay, Appleton, Wausau
- - La Crosse, Eau Claire, Superior
- - Janesville, Racine, Kenosha
Wisconsin VA Healthcare Rating: Very Good
Three full-service VA medical centers provide excellent coverage statewide. The Tomah VAMC is conveniently located near Fort McCoy for veterans in western Wisconsin.
Pros & Cons of Retiring in Wisconsin
✅ Pros
- ✓ 100% military retirement tax exemption
- ✓ Social Security also tax-free
- ✓ Affordable cost of living (5% below average)
- ✓ Fort McCoy provides employment opportunities
- ✓ Excellent Wisconsin GI Bill (8 semesters free)
- ✓ 3 VA medical centers statewide
- ✓ Beautiful lakes and outdoor recreation
❌ Cons
- ✗ Cold, snowy winters
- ✗ Higher than average property taxes
- ✗ High income tax rates on civilian income
- ✗ Limited active-duty military presence
- ✗ Distance from major military bases
- ✗ Smaller job market than coastal states
Frequently Asked Questions
Does Wisconsin tax military retirement pay?
No. Wisconsin exempts 100% of military retirement pay from state income tax. There are no income limits or age requirements for this exemption.
Is Wisconsin a good state for military retirees?
Yes! Wisconsin offers 100% military retirement exemption AND Social Security is tax-free. Combined with affordable living, excellent VA healthcare, and the generous Wisconsin GI Bill, it's very attractive for military retirees who don't mind cold winters.
Does Wisconsin tax Social Security?
No! Wisconsin does not tax Social Security benefits at all. Combined with the military retirement exemption, this makes Wisconsin very tax-friendly for military retirees receiving both income sources.
What military bases are in Wisconsin?
Fort McCoy (major Army training center with 6,000+ employees), Truax Field in Madison (115th Fighter Wing with F-35s), Volk Field CRTC, and General Mitchell ANG Base in Milwaukee. Fort McCoy is the largest employer.
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