Question

State of Wisconsin retirement annuity taxable in Arizona?

Forum|Forum|6 years ago
April 9, 2020
1 reply
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We are now AZ residents but receive our State of Wisconsin Retirement annuities from our past work in Wisconsin. Wisconsin deducts taxes even though we do not live there, have no property etc. Is this correct?

AmyC

Employee

You can ask WI annuity to stop deducting WI tax from your payments. Some states require you to file a return if you have income from that state. WI is not requiring you to file WI since that income is not taxable in WI.

That income is taxable in AZ. Withholding AZ payments or making estimated payments makes more sense in your case.

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J

jjansen777Author

I understand that my Wisconsin State pension is not taxable, but TurboTax does give me the correct choice. We are AZ residents now but get our WI state pensions here.

The choices to the question of What was your State of Residence (2019)?

Answer choices are:

__ Just Wisconsin

__ More than one state of residence

__ Made money in Wisconsin last year but never lived there.

None of these are correct so what do I do?

B

BillM223

Yes, Amy is correct that you need to contact the annuity plan and tell them to stop withholding Wisconsin state taxes.

Unfortunately, since the plan has already sent the money to Wisconsin, the only way you can get it back is by filing a Wisconsin nonresident return.

This means that you have to answer "Made money in Wisconsin last year but never lived there" even though that is not technically true - you have to do this to get the right forms for Wisconsin.

Then, as you go through the Wisconsin interview, make sure that none of the federal income is allocated to Wisconsin. This will give you zero Wisconsin income and will refund your entire amount withheld (which you can use to pay Arizona).

Note that unfortunately since we are 4 months into 2020, you will have to do the same thing next year, but hopefully that will be the last year.

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