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GSC recovery target: Wisconsin-specific Roth conversion tax answer

Wisconsin Roth Conversion Tax 2026

A traditional IRA-to-Roth IRA conversion is generally taxable for federal purposes to the extent the traditional IRA distribution is taxable. For a full-year Wisconsin resident, Wisconsin generally taxes the same pension and annuity amount that is federally taxable, but Wisconsin also has retirement-income subtraction checks that can matter for older taxpayers. In the Wisconsin DOR 2025 Fall Tax Updates, the department said traditional-IRA-to-Roth-IRA conversion income may be eligible for the newer retirement income subtraction if the taxpayer is at least age 67 at the end of the tax year.

Federal starting point

Traditional IRA distributions are fully or partly taxable when converted

Wisconsin resident rule

Generally follows federally taxable pension/annuity amount

Age 67 subtraction check

Conversion income may qualify if the taxpayer is age 67+ at year-end

Core forms

Form 1099-R, Form 8606 when basis exists, Wisconsin return schedules

What matters for 2026

  • Do not treat a Roth conversion as a deduction. It is usually a taxable ordinary-income event now in exchange for potential Roth treatment later.
  • Wisconsin residents should model federal taxable conversion income first, then check Wisconsin retirement-income subtraction eligibility and state estimated-tax exposure.
  • Age, federal AGI, filing status, credit tradeoffs, and whether the account has nondeductible basis can change the final state result.

Next step

Use the main deduction guide for calculator inputs, eligibility checks, related forms, and broader federal rules.

Open the full guide

Planning workflow

  1. 1Estimate taxable income before conversion, then size the conversion to the intended federal bracket instead of converting an arbitrary amount.
  2. 2Check Wisconsin residency status and whether the conversion is included in federal adjusted gross income.
  3. 3If the taxpayer is at least age 67 at year-end, test Wisconsin retirement-income subtraction eligibility before estimating state tax.
  4. 4Set aside federal and Wisconsin estimated-tax payments or withholding if the conversion materially increases current-year tax.
  5. 5Keep Form 1099-R, Form 8606 basis records, brokerage conversion confirmation, and the Wisconsin retirement subtraction worksheet together.

Records to keep

  • IRA conversion confirmation and Form 1099-R
  • Form 8606 if the IRA includes nondeductible basis
  • Federal bracket and taxable-income worksheet before and after conversion
  • Wisconsin residency, age, FAGI, and retirement-income subtraction workpapers
  • Estimated-tax or withholding confirmation for federal and Wisconsin payments

Primary sources

IRS Topic 451Explains IRA distributions, Roth IRA treatment, and that the IRA rollover limitation does not apply to traditional-to-Roth conversions.Wisconsin DOR retired persons FAQWisconsin says full-year residents generally tax the same pension and annuity amount taxable for federal purposes, with listed exceptions.Wisconsin DOR 2025 Fall Tax UpdatesThe DOR says traditional-IRA-to-Roth-IRA conversion income may be eligible for the newer retirement income subtraction if the taxpayer is age 67+ at year-end.