Wisconsin is screwing with your retirement planning
Guess what? Wisconsin is preventing you from taking advantage of a change in federal law making converting from a traditional IRA to a Roth IRA easier. What’s worse, Wisconsin is the only state doing it.
Unlike the rest of the country, Wisconsin law did not change with the federal law. People trying to take advantage of the change in federal law will still get hit with the entire tax burden in the year of the distribution.
The change in Wisconsin law to match federal law was included in the governor’s budget sent to the legislature. However, Democrats in the legislature took the provision out when the Department of Revenue said it would result in a net loss of $930,000 in 2010-2011 and $2.2 million in 2011-2012.
The Democrats in the legislature were desperate for every last penny they could find to pay for their spending in the last budget, so Wisconsin became the only state not to put its tax code in line with the federal government.
At the MacIver Institute this week, I explain the provision and what’s being done to change Wisconsin law.