Active-duty pay
Taxed
Active-duty pay taxable to WI residents.
State Guide · WI
Wisconsin — Military Tax Treatment
Wisconsin fully exempts military retirement but taxes active duty pay. Guard members on routine drill pay WI income tax on those wages. State emergency activation pay may have different treatment.
Tax treatment at a glance
Guard & Reserve drill pay
Taxed
Guard and Reserve routine drill pay is generally taxable Wisconsin income. Pay during state emergency activations may qualify for different treatment — verify with Wisconsin DoR.
Military retirement pay
Fully Exempt
Military retirement pay fully exempt.
The numbers · verified for tax year 2025
Top marginal rate
7.65%
Retirement-pay exemption
Full
All U.S. military retirement pay, including Survivor Benefit Plan payments, is 100% exempt from Wisconsin income tax — no cap, no age requirement.
Standard deduction
Wisconsin uses a sliding-scale standard deduction that phases out as income rises; the 2025 maximum is about $13,560 single / $25,110 married filing jointly. The 7.65% top rate applies only above ~$304k single / $405k MFJ.
VA disability compensation
Always tax-free
Federally tax-free under 38 USC § 5301. No state taxes VA disability compensation as income — Wisconsin included.
Survivor Benefit Plan (SBP)
Follows retirement
Wisconsin exempts military retirement — SBP annuities are generally exempt.
Federal rules that override state law
SCRA — Servicemembers Civil Relief Act
Active-duty servicemembers pay state income tax only to their state of legal domicile — not the state where they are stationed. If you are from Texas and stationed in Wisconsin, Wisconsin cannot tax your military pay. This applies during all active duty periods and during Guard/Reserve mobilizations on federal (Title 10) orders.
MSRRA — Military Spouses Residency Relief Act
Military spouses can maintain their home-state domicile even when living in a different state due to their servicemember's orders. A spouse who is a Texas resident following their servicemember to Wisconsin can keep Texas as their tax domicile and avoid Wisconsin state income tax on their wages.
Guard & Reserve — the SCRA gap
SCRA pay protections apply during federal (Title 10) activation orders. During routine drill weekends and state-only activations, Guard and Reserve members are state residents serving in their home state — SCRA does not protect their drill pay from state income tax. Whether Wisconsin exempts that pay is the state-specific question answered above.
Filing watch-outs
- 01Retirement exemption: Schedule SB of WI Form 1 — military retirement income deduction
- 02Guard emergency activation pay: verify with WI DoR for potential exempt treatment
Veteran-specific tax benefits
Disabled veteran property tax credit.
Official authority
https://www.revenue.wi.gov/ ↗State tax law changes annually. Verify current rules with the Wisconsin Department of Revenue before making any tax decision.
Wisconsin military tax — common questions
Does Wisconsin tax military retirement pay in 2026?
Wisconsin fully exempts military retirement pay. Military retirement pay fully exempt.
Does Wisconsin tax active-duty military pay?
Wisconsin taxes active-duty military pay for state residents. Active-duty pay taxable to WI residents. Under the SCRA, Wisconsin can only tax the military pay of service members who are legally domiciled in Wisconsin — not those merely stationed there.
Does Wisconsin tax National Guard and Reserve drill pay?
Wisconsin taxes Guard and Reserve drill pay. Guard and Reserve routine drill pay is generally taxable Wisconsin income. Pay during state emergency activations may qualify for different treatment — verify with Wisconsin DoR.
Is VA disability compensation taxed in Wisconsin?
No. VA disability compensation is federally tax-free under 38 U.S.C. § 5301, and no state — including Wisconsin — taxes it as income.
If I'm stationed in Wisconsin but claim another state, can Wisconsin tax my military pay?
No. Under the Servicemembers Civil Relief Act (SCRA), active-duty pay is taxable only by your state of legal domicile, not the state where you are stationed. If your domicile is elsewhere, Wisconsin cannot tax your active-duty military pay. Military spouses get the same protection under the MSRRA.
Related tools
Other state guides