Wisconsin Income Tax Rates & Brackets (Tax Year 2025 — Filed in 2026)

Living in Wisconsin, Working for an Out-of-State Employer

As a Wisconsin resident, you owe Wisconsin income tax on all income, regardless of where your employer is located.

What this means:

• Your employer’s location (Illinois, California, New York, etc.) does NOT determine your Wisconsin tax obligation.
• Income earned remotely for employers headquartered outside Wisconsin is fully taxable in Wisconsin.
• Your employer may not withhold Wisconsin income tax automatically — you may need to request Wisconsin withholding or make estimated tax payments.

Example: A Wisconsin resident working remotely from their Milwaukee home for a Chicago-based company owes Wisconsin income tax on all wages, not Illinois tax (unless they physically work in Illinois on certain days).

Source: https://www.revenue.wi.gov/Pages/FAQS/pcs-work.aspx

Working in Wisconsin, Living in Another State

Nonresidents who physically perform work in Wisconsin owe Wisconsin income tax on Wisconsin-source income.

Physical Presence Rule: Wisconsin taxes nonresidents based on where work is physically performed. If a Minnesota resident commutes to work in Wisconsin, their Wisconsin wages are subject to Wisconsin income tax (unless covered by a reciprocity agreement).

Exception — Reciprocity: Residents of Illinois, Indiana, Kentucky, or Michigan working in Wisconsin pay income tax only to their home state on wages. See the Reciprocal Agreements section below.

Source: https://www.revenue.wi.gov/Pages/FAQS/pcs-work.aspx | https://www.revenue.wi.gov/DOR%20Publications/pb122.pdf

⚠️ Interstate Tax Risk Indicator

Remote workers with Wisconsin connections commonly encounter complications with the following states:

States requiring careful planning when working across state lines:

• Illinois — Reciprocity applies for wages; self-employment income is not covered by reciprocity
• Minnesota — No reciprocity; Wisconsin residents working in Minnesota must file Minnesota returns and claim a credit in Wisconsin
• New York — Applies a “convenience of the employer” rule that can tax Wisconsin residents working remotely for New York employers
• California — Aggressive residency rules for extended stays; may claim taxing rights over former California residents
• Ohio, Pennsylvania — Complex local income tax systems that may apply to nonresidents working in those states

Source: https://www.revenue.wi.gov/Pages/FAQS/pcs-work.aspx | https://www.revenue.wi.gov/DOR%20Publications/pb125.pdf

“Convenience of the Employer” Rule

Wisconsin does NOT apply a “convenience of the employer” rule. Nonresidents are taxed by Wisconsin only on income from work physically performed within Wisconsin’s borders.

However, be aware: Other states (notably New York and certain others) do apply this rule, which means if you are a Wisconsin resident working remotely for a New York employer, New York may assert the right to tax your income as if it were earned in New York — even though you physically work in Wisconsin. In such cases, you may need to file a New York nonresident return and claim a Wisconsin credit for taxes paid to New York.

Source: https://www.revenue.wi.gov/Pages/FAQS/pcs-work.aspx

Reciprocal Agreements

Wisconsin has reciprocal agreements with four states:

What reciprocity means:

• Wisconsin residents working in one of these four states pay Wisconsin income tax on those wages — not the other state’s income tax.
• Residents of these four states working in Wisconsin pay their home state’s income tax — not Wisconsin income tax.
• Reciprocity applies only to income earned as an employee (wages, salaries, commissions, fees). It does NOT apply to self-employment income, rental income, business income, capital gains, or lottery winnings.

Special note on Indiana: Reciprocity does not apply if the Wisconsin resident is considered an Indiana resident for Indiana tax purposes. Individuals domiciled in Wisconsin employed in Indiana should contact the Indiana Department of Revenue if there is any question about Indiana residency: phone (317) 232-2240 or in.gov/dor.

Special note on Kentucky: Reciprocity does not apply if the Wisconsin resident lives in Kentucky for more than 183 days during the taxable year.

To claim reciprocity exemption from Wisconsin withholding:
Nonresident employees working in Wisconsin submit Wisconsin Form W-220 to their Wisconsin employer to claim exemption from Wisconsin income tax withholding.
Form W-220: https://www.revenue.wi.gov/TaxForms2017through2019/w-220.pdf

Source: https://www.revenue.wi.gov/DOR%20Publications/pb121.pdf | https://www.revenue.wi.gov/Pages/FAQS/pcs-work.aspx

Multi-State Tax Filing

When earning income in multiple states (outside of reciprocity states):

Step 1: File Wisconsin Form 1 as a full-year resident, reporting all income from all sources.

Step 2: File nonresident returns in each other state where you earned income (if required by that state’s rules).

Step 3: Claim a Credit for Net Tax Paid to Another State on your Wisconsin return using Wisconsin Schedule OS to prevent double taxation.

Limitations on the credit:

• The credit cannot exceed your Wisconsin tax liability.
• The credit is limited to the lesser of the Wisconsin tax on that income or the tax actually paid to the other state.
• No credit is available for income covered by a reciprocity agreement (since it is only taxed once).

Forms required:

• Wisconsin Form 1 — main resident return
• Wisconsin Schedule OS — Credit for Net Tax Paid to Another State
• The other state’s nonresident return (copy required as attachment)

Source: https://www.revenue.wi.gov/DOR%20Publications/pb125.pdf