Wisconsin SSDI Tax Rules and What You Owe the State

How Wisconsin Taxes Social Security Disability Income

Wisconsin does not tax Social Security Disability Insurance (SSDI) benefits. If SSDI is your only income, you owe no state income tax on those payments. This is true whether you live in Wisconsin year-round or moved there after you started receiving benefits.

However, Wisconsin does tax other income you receive alongside SSDI—wages, pensions, interest, rental income, and unemployment benefits all count. The state also taxes some of your SSDI if you have substantial non-SSDI income that pushes your total above certain thresholds, though this is rare for most recipients.

The federal government may tax your SSDI depending on your combined income (SSDI plus half your SSDI plus all other income). Wisconsin follows federal rules on this point: if you owe federal tax on SSDI, you must report it to Wisconsin as well. If you owe no federal tax on SSDI, Wisconsin will not tax it either.

Key Takeaways

Wisconsin exempts SSDI from state income tax entirely, so SSDI alone creates no state tax liability.
Other income you receive—wages, pensions, interest—is taxable in Wisconsin and must be reported on your state return.
If the federal government taxes part of your SSDI due to high combined income, you report that same amount to Wisconsin.
You must file a Wisconsin tax return if your total income (including SSDI) exceeds the filing threshold for your age and filing status.

When You Must File a Wisconsin Tax Return

Wisconsin requires you to file a state tax return if your income exceeds a threshold that depends on your age and filing status. The threshold changes each year. For 2024, a single person under 65 must file if gross income is $13,800 or more; a single person 65 or older must file if gross income is $17,500 or more.

For this purpose, "gross income" includes wages, self-employment income, pensions, interest, dividends, and rental income—but not SSDI itself. If SSDI is your only income, you will not reach the filing threshold and do not have to file a Wisconsin return.

If you have both SSDI and other income (such as part-time wages or a pension), add up the non-SSDI income and compare it to the threshold. If it exceeds the threshold, you must file. The Wisconsin Department of Revenue publishes current thresholds each January on its website.

Reporting SSDI on Your Wisconsin Return

If you must file a Wisconsin return because you have other income, you will report SSDI on the return—but only the portion that is taxable under federal rules. Most SSDI recipients report zero taxable SSDI because their combined income does not trigger federal taxation.

To determine how much of your SSDI is taxable federally, use the IRS worksheet in Publication 915 or ask a tax preparer. The calculation involves your "combined income" (adjusted gross income plus nontaxable interest plus half your SSDI). If combined income is below $25,000 (single) or $32,000 (married filing jointly), your SSDI is not taxable. Above those thresholds, up to 85 percent of your SSDI may be taxable.

Report the taxable portion on Wisconsin Form 1 (the state income tax return) on the line for Social Security benefits. Attach a copy of your federal Schedule SSA-1099 or SSA-1098 (the form the Social Security Administration sends you each January) to your state return.

Other Income Alongside SSDI in Wisconsin

If you work part-time or receive a pension, annuity, or other income while on SSDI, Wisconsin taxes that income at the same rates as any other resident. Wisconsin has a progressive tax system: rates range from 3.54 percent to 7.65 percent depending on your total income.

Earned income (wages from work) is taxed the same way. If you earn $15,000 in wages and receive $20,000 in SSDI, you owe Wisconsin tax on the $15,000 but not on the SSDI. You must file a return because your non-SSDI income exceeds the filing threshold.

If you receive a pension from a former employer, Wisconsin taxes it unless it qualifies for a specific exemption. Military pensions and some government pensions have exemptions; private pensions do not. Check with the Wisconsin Department of Revenue or a tax preparer if you are unsure whether your pension is taxable.

Federal Taxation of SSDI and Wisconsin Reporting

The federal government taxes SSDI only if your combined income exceeds $25,000 (single filer) or $32,000 (married filing jointly). Combined income is your adjusted gross income plus nontaxable interest plus half your SSDI amount. If you are below those thresholds, the IRS does not tax your SSDI, and neither does Wisconsin.

If you are above the threshold, the IRS uses a two-tier system. Between the threshold and a higher limit, up to 50 percent of your SSDI may be taxable. Above the higher limit ($34,000 for single filers, $44,000 for married filers), up to 85 percent may be taxable. This is complex math; the IRS worksheet in Publication 915 walks through it step by step.

Wisconsin does not recalculate this amount. You use the federal taxable SSDI figure and report it on your Wisconsin return. If you owe federal tax on SSDI, you report the same taxable amount to Wisconsin. If you owe no federal tax on SSDI, you report zero to Wisconsin.

What to Do If You Receive a Wisconsin Tax Notice

If Wisconsin sends you a notice saying you owe tax on SSDI, contact the Wisconsin Department of Revenue when ready. This may be an error—the state should not be taxing SSDI itself. Bring the notice and a copy of your Social Security Administration benefit statement (which shows your SSDI amount) to the Department of Revenue office or call their helpline.

If the notice relates to other income (wages, pensions, interest), the tax may be correct. Review the notice to see which income sources Wisconsin is taxing. If you disagree with the amount, you can request a hearing or work with a tax preparer to file an amended return.

Wisconsin allows you to request a payment plan if you owe tax but cannot pay in full. Contact the Department of Revenue to discuss options. You may also be able to claim a hardship exemption in some cases, though this is uncommon.

Frequently Asked Questions

Do I have to file a Wisconsin tax return if I only get SSDI?

No. SSDI alone does not count toward the filing threshold in Wisconsin. You file only if you have other income (wages, pensions, interest) that exceeds the threshold for your age and filing status. Check the Wisconsin Department of Revenue website for current thresholds.

What if I work part-time and get SSDI?

You must file a Wisconsin return if your wages exceed the filing threshold. Wisconsin taxes your wages but not your SSDI. Report both on your return: wages on the earned income line and SSDI (if any is taxable federally) on the Social Security benefits line.

Can Wisconsin tax my SSDI if I moved there from another state?

No. Wisconsin does not tax SSDI regardless of when you moved or where you received it. If you moved mid-year, you may owe tax to your former state on income earned there, but Wisconsin will not tax your SSDI.

What if my SSDI is taxable federally but I live in Wisconsin?

You report the same taxable amount to Wisconsin that you report to the IRS. Use the federal calculation (Publication 915) to find the taxable portion, then include it on your Wisconsin return. Wisconsin follows federal rules on SSDI taxation.

Where do I send my Wisconsin tax return?

Mail your completed Wisconsin Form 1 and supporting documents to the Wisconsin Department of Revenue, PO Box 8949, Madison, WI 53708-8949. You can also file electronically through the state's online system if you use tax software or a preparer. Check the Department of Revenue website for current mailing addresses and e-file options.

This guide is for general information only and is not medical, financial, legal, or other professional advice. For decisions specific to your situation, consult a qualified professional. See our Editorial Policy.