SB 281

This bill exempts from taxation up to $8,000 in payments received in 2023 by

an individual from the U.S. Civil Service Retirement System and the full amount of

such payments received in 2024 and beyond. Under the bill, the exemption applies

without regard to when the individual became a member of or retired under CSRS,

which was the retirement system used by the federal government until 1984. In

1984, the federal government established a new retirement system, but federal

employees covered by CSRS were allowed to choose to stay in CSRS.

Under current law, payments received from CSRS are exempt from Wisconsin

income taxes but generally only if the individual was a member of or retired under

CSRS as of December 31, 1963. Similarly, payments received from other retirement

systems, such as payments received from Milwaukee city and county retirement

systems, are exempt from taxation for individuals who were members of or retired

from the systems as of December 31, 1963. Current law also provides a tax

exemption for payments received from the U.S. Military Employee Retirement

System and retirement payments that relate to service with the U.S. Coast Guard,

the commissioned corps of the National Oceanic and Atmospheric Administration,

and the commissioned corps of the U.S. Public Health Service. Also under current

law, an individual may subtract up to $5,000 of payments or distributions received

from a qualified retirement plan or individual retirement account if the individual

is at least 65 years old and has federal adjusted gross income of less than $15,000,

or $30,000 if married.

Because this bill relates to an exemption from state or local taxes, it may be

referred to the Joint Survey Committee on Tax Exemptions for a report to be printed

as an appendix to the bill.