Wisconsin has a state income tax

Yes. Wisconsin taxes income earned by residents and non-residents who work in the state. The tax is progressive, meaning the rate increases as your income increases. Wisconsin's Department of Revenue collects it, and you report it on your state tax return each year, separate from your federal return.

The state income tax funds education, transportation, healthcare programs, and other state services. Unlike some states, Wisconsin does not have a flat tax rate — what you owe depends on your filing status and total income for the year.

Key Takeaways

  • Wisconsin residents pay state income tax on wages, self-employment income, interest, dividends, and other sources, with rates ranging from 3.54% to 7.65% depending on income level.
  • Non-residents who work in Wisconsin may owe state tax on income earned in the state, even if they live elsewhere.
  • You file Wisconsin income tax on Form 1 (the state equivalent of the federal Form 1040) by April 15 each year, unless you request an extension.
  • Wisconsin offers tax credits for dependent children, education expenses, and property tax or rent paid, which can reduce the amount you owe.
  • If you are retired or over 65, Wisconsin has specific deductions and credits that may lower your state tax burden.

Wisconsin income tax rates and brackets for 2024

Wisconsin uses five tax brackets. The lowest rate is 3.54% on the first portion of your income, and the highest is 7.65% on income above a certain threshold. The exact dollar amounts where rates change depend on your filing status — single, married filing jointly, married filing separately, or head of household.

For example, in 2024, a single filer pays 3.54% on income up to $15,225, then 4.89% on income from $15,225 to $61,290, and so on. These brackets adjust each year for inflation. Married couples filing jointly have higher income thresholds before moving to the next bracket, which means they may pay less total tax on the same combined income than two single filers.

The Wisconsin Department of Revenue publishes updated brackets and tax tables each January. You can find them on the department's website or ask a tax preparer to confirm the rates that apply to your situation.

Who has to file a Wisconsin state tax return

You must file if your Wisconsin income exceeds the filing threshold for your status. In 2024, a single person with income over $15,225 generally must file. Married couples filing jointly must file if their combined income exceeds $20,300. These thresholds are lower than federal requirements, so you may need to file a Wisconsin return even if you do not owe federal tax.

Non-residents who earned income in Wisconsin during the year must also file, even if they live in another state or country. This includes people who worked in Wisconsin for part of the year or had self-employment income from Wisconsin sources. You report only the Wisconsin-source income on your state return.

Students, retirees, and people with very low income should still check the current thresholds, because rules change and some situations have exceptions. The Wisconsin Department of Revenue website has a filing requirement worksheet you can use to determine whether you must file.

Types of income Wisconsin taxes

Wisconsin taxes wages and salaries from employment, self-employment income, interest and dividend income, capital gains, rental income, and income from retirement accounts (with some exceptions). If you received a W-2 from an employer, that income is taxable. If you received a 1099 for contract work or self-employment, that is also taxable in Wisconsin.

Social Security benefits are not taxed by Wisconsin, even though they may be taxed federally depending on your total income. Certain retirement income, such as distributions from traditional IRAs and 401(k) plans, is taxable. However, Wisconsin allows a deduction for some retirement income if you meet age and income requirements — typically for people over 65 or those receiving military pensions.

Income from bonds issued by Wisconsin municipalities is exempt from state tax. Income from U.S. Treasury securities is also exempt. These exemptions are built into the tax code, so you do not report them on your return.

Tax credits and deductions that reduce what you owe

Wisconsin offers several credits that directly reduce your tax bill. The Earned Income Tax Credit (EITC) is available to low- and moderate-income workers and is based on your federal EITC. Wisconsin's version is a percentage of the federal credit, so if you receive a federal EITC, you likely receive a Wisconsin one as well.

The Child and Dependent Care Credit helps pay for childcare expenses while you work. The Dependent Exemption Credit provides a credit for each dependent child or other may have access to dependent. Property tax and rent credits are available if you paid property tax or rent during the year and your income falls below certain limits — these credits can be substantial for renters and homeowners with lower incomes.

Wisconsin also allows deductions for education expenses, including tuition paid to Wisconsin colleges and universities. If you are over 65 or retired, you may deduct a portion of your retirement income. Military families may deduct military income. These deductions reduce your taxable income before the tax rate is applied, which lowers your overall tax.

How to file your Wisconsin state tax return

You file on Form 1, Wisconsin's individual income tax return. You can file by mail, electronically through the Wisconsin Department of Revenue's website, or through tax software that supports Wisconsin returns. Most tax software (TurboTax, H&R Block, TaxAct) includes Wisconsin forms and will calculate your state tax if you provide the necessary income information.

The deadline is April 15 each year, the same as the federal deadline. If you need more time, you can request an extension, which gives you until October 15 to file. An extension to file is not an extension to pay — if you owe tax, you should pay by April 15 to avoid interest and penalties, even if you file late.

You will need your Social Security number, income documents (W-2s, 1099s, bank statements showing interest), and records of any deductions or credits you are claiming. If you file electronically, the return is processed faster and you receive a refund sooner if you are due one.

What happens if you do not pay or file on time

If you owe tax and do not pay by April 15, Wisconsin charges interest on the unpaid amount. The interest rate changes quarterly and is based on the federal rate plus a state component. Penalties also apply — typically 5% of the unpaid tax per month, up to 25% total.

If you do not file a return when you are required to, the penalty is 5% per month of the tax you owe, also up to 25%. These penalties stack on top of interest, so the longer you wait, the more you owe. If you cannot pay in full, you can contact the Wisconsin Department of Revenue to set up a payment plan.

If you filed late but did not owe tax, or if you were due a refund, there is no penalty. However, you cannot receive a refund if you do not file — the state will not send you money you are owed unless you submit a return.

Frequently Asked Questions

Do I have to pay Wisconsin income tax if I live in another state but work in Wisconsin?

Yes. Wisconsin taxes income earned within the state, regardless of where you live. You file a Wisconsin return reporting only your Wisconsin-source income. You may also file a return in your home state, but most states allow a credit for taxes paid to another state to avoid double taxation.

Can I deduct federal income tax from my Wisconsin taxable income?

No. Wisconsin does not allow a deduction for federal income tax paid. However, you can deduct state and local property taxes (up to $10,000 total on your federal return), and Wisconsin allows deductions for certain retirement income, education expenses, and military income.

What if I am retired and living on Social Security and a pension?

Social Security is not taxed by Wisconsin. Pension income may be taxable, but Wisconsin allows a deduction for retirement income if you are over 65 or receiving a military pension. The deduction phases out at higher income levels, so you may owe little or no state tax depending on your total income and filing status.

Is there a Wisconsin state income tax on investment income like stocks and bonds?

Yes. Capital gains, dividends, and interest are taxed as income in Wisconsin. However, interest from Wisconsin municipal bonds and U.S. Treasury securities is exempt. Long-term capital gains are taxed at the same rate as ordinary income — Wisconsin does not have a preferential rate for investment gains.

How do I know if I may have access to for the property tax or rent credit?

The property tax and rent credit is based on your household income and the amount of property tax or rent you paid during the year. Income limits vary by filing status. You claim the credit on Schedule CR, which is part of your Wisconsin tax return. The Wisconsin Department of Revenue website has a worksheet to help you determine if you may be due a credit.