Is readjustment pay retirement pay??
Is readjustment pay from the military retirement pay system (fund)? The reason I am asking is that Wisconsin doesn't tax military retirement pay and I was paid readjustment (separation) pay when I was involuntarily separated for the service in 2008. I know the federal government includes it in my gross pay and I paid taxes (at a higher rate) on it which is correct. However, since I will have to pay it back when I collect my military retirement at age 60 (2021), I would think it was retirement pay and for Wisconsin purposes I could claim a lower gross for my state taxes than I did on my federal taxes.
Any help would be appreciated.