Wisconsin — Personal Income Tax

Wisconsin residents, part-year residents, and nonresidents with Wisconsin-source income may be required to file a personal income tax return depending on gross income, filing status, age, and dependency status.

Source: Wis. Stat. § 71.03(2)(a)(L))

## Residents

Wisconsin residents must file if their gross income meets or exceeds threshold amounts that vary by filing status and age. For the 2025 tax year, single residents under age 65 must file if gross income is $14,260 or more; married residents filing jointly (both under age 65) must file if gross income is $26,510 or more. Higher age-based thresholds apply for taxpayers age 65 or older.

Source: Wisconsin DOR Individual Income Tax Filing Requirements

Gross income means all income before deducting expenses that is reportable to Wisconsin. It includes income received in the form of money, property, or services, but excludes items exempt from Wisconsin tax, such as Social Security benefits and U.S. government interest.

Source: Wisconsin DOR Individual Income Tax Filing Requirements

## Dependents

Taxpayers who can be claimed as a dependent on someone else's return face different filing thresholds. A dependent must file a Wisconsin return if either: (1) gross income exceeds $1,350 and includes at least $451 of unearned income (interest, dividends, capital gain distributions, or taxable scholarships not reported on Form W-2), or (2) gross income exceeds filing-status-specific thresholds.

Source: Wisconsin DOR Individual Income Tax Filing Requirements

## Nonresidents and Part-Year Residents

Nonresidents and part-year residents must file if their Wisconsin gross income is $2,000 or more. For married couples in this category, the combined gross income threshold is $2,000. Wisconsin gross income for nonresidents and part-year residents includes only income from Wisconsin sources.

Source: Wisconsin DOR Publication 122, Tax Information for Part-Year Residents and Nonresidents

Nonresidents must measure gross income before expenses are deducted. For example, a nonresident partner receiving net partnership income below $2,000 may still be required to file if their proportionate share of partnership gross income equals or exceeds $2,000.

Source: Wisconsin DOR Individual Income Tax Filing Requirements

## Additional Filing Requirements

Certain taxpayers must file even if income falls below the standard thresholds. This includes individuals who owe a penalty on an IRA, retirement plan, Coverdell education savings account, ABLE account, health savings account, or Archer medical savings account.

Source: Wisconsin DOR Individual Income Tax Filing Requirements

The Wisconsin Department of Revenue retains authority to require any person other than a corporation to file an income tax return when, in the department's judgment, a return should be filed.

Source: Wis. Stat. § 71.03(6)(b)(L))

Wisconsin applies four marginal tax rates to single individuals, heads of household, and fiduciaries (other than nuclear decommissioning trust or reserve funds) for tax years beginning after December 31, 2024. Taxable income from $0 to $14,680 is taxed at 3.50%; income exceeding $14,680 but not exceeding $50,480 is taxed at 4.40%; income exceeding $50,480 but not exceeding $323,290 is taxed at 5.30%; and income exceeding $323,290 is taxed at 7.65%.

Source: Wis. Stat. § 71.06(1r)

Wisconsin applies four marginal tax rates to married couples filing jointly for tax years beginning after December 31, 2024. Taxable income from $0 to $19,580 is taxed at 3.50%; income exceeding $19,580 but not exceeding $67,300 is taxed at 4.40%; income exceeding $67,300 but not exceeding $431,060 is taxed at 5.30%; and income exceeding $431,060 is taxed at 7.65%.

Source: Wis. Stat. § 71.06(2)(k)

Wisconsin personal income tax is imposed on the net income of individuals and fiduciaries. Wisconsin taxable income begins with federal adjusted gross income, then applies Wisconsin-specific modifications prescribed in Wis. Stat. § 71.05, subtracts the Wisconsin standard deduction, and subtracts the personal exemption. This federal conformity framework means Wisconsin generally follows federal income definitions while layering state additions and subtractions.

Source: Wis. Stat. § 71.01(13), Wis. Stat. § 71.01(16), Wis. Stat. § 71.02(1)

Wisconsin determines individual residency for personal income tax purposes solely on the basis of domicile. An individual is a Wisconsin resident if domiciled in Wisconsin for the entire taxable year, a part-year resident if domiciled in Wisconsin for part of the taxable year, and a nonresident if not domiciled in Wisconsin at any time during the taxable year.

## Statutory Definition of Domicile

Wisconsin statute defines "domicile" as an individual's true, fixed, and permanent home where the individual intends to remain permanently and indefinitely and to which, whenever absent, the individual intends to return. No individual may have more than one domicile at any time.

Source: Wis. Stat. § 71.01(1n)

The Wisconsin Department of Revenue applies a consistent definition across its guidance: domicile is the permanent legal home a person intends to use for an indefinite or unlimited period and to which, when absent, the person intends to return. Physical presence in Wisconsin is not required to maintain Wisconsin domicile, and a person may be physically present or residing in one state while maintaining domicile in another.

Source: Wisconsin DOR Publication 122, Tax Information for Part-Year Residents and Nonresidents

## Intent as the Controlling Factor

Wisconsin residency turns on the taxpayer's intent regarding permanence of residence, not on physical presence alone. A legal resident of Wisconsin is a person who maintains domicile in Wisconsin, whether or not physically present in Wisconsin or living outside the state. A person has only one domicile at any point in time.

Source: Wisconsin DOR Legal Residence/Domicile FAQ

## Factors the Department Considers

The Department of Revenue examines many factors to determine domicile, including where the individual lives, where the individual votes, where the individual registers vehicles, and where the individual owns or rents property. When an individual claims a change of domicile, the department may require the individual to complete a Legal Residence (Domicile) Questionnaire.

Source: Wisconsin DOR Legal Residence/Domicile FAQ

Wisconsin administrative regulation requires individuals claiming a change of residence (domicile) from Wisconsin to another state to file the "Residence Questionnaire," which is a part of the Form 1NPR income tax form, with the Wisconsin Department of Revenue by attaching it to their Wisconsin income tax return for the year they claim to have changed residence, and to furnish other information the department may require.

Source: Wis. Admin. Code Tax 2.01

## Dual-State Residency Possible

Wisconsin's domicile-only test can result in dual-state residency when another state applies a different residency standard. For example, Illinois defines a resident to include any individual who is in Illinois for other than a temporary or transitory purpose during the taxable year, even if domiciled elsewhere. A person domiciled in Wisconsin who takes a job in Illinois intending to return to Wisconsin in two to three years remains a resident of Wisconsin for Wisconsin tax purposes (because still domiciled in Wisconsin) but may simultaneously be a resident of Illinois if Illinois considers the stay other than temporary or transitory.

Source: Wis. Admin. Code Tax 2.02(6)(b)

Wisconsin taxes nonresidents only on income derived from Wisconsin sources. The statutory framework distinguishes among wage and salary income, business income, pass-through entity income, rental income, and intangible income, applying different sourcing rules to each category.

## Wage and Salary Income: Services-Performed Rule

Employee compensation is taxable by Wisconsin only if the services are performed in Wisconsin. A nonresident who performs services for an employer in Wisconsin owes Wisconsin tax on the wages attributable to those services, regardless of where the employer is located or where the employee is paid. Conversely, a nonresident who performs services entirely outside Wisconsin owes no Wisconsin tax on those wages, even if the employer has a Wisconsin office or the paycheck is issued from Wisconsin.

Example: A Florida resident spends four months at a cottage in northern Wisconsin and works part-time at a local gift shop during that time. The income earned from the part-time job is taxable by Wisconsin because the services were performed in Wisconsin.

Source: Wisconsin DOR Publication 122, Tax Information for Part-Year Residents and Nonresidents

## Business Income: Allocation and Apportionment

Nonresident individuals and nonresident estates and trusts engaged in business both within and outside Wisconsin are taxed only on income derived from business transacted and property located within Wisconsin. Wisconsin statute § 71.04(4) establishes a two-step method:

Step 1 – Allocation. The taxpayer may determine the amount of income attributable to Wisconsin by allocation and separate accounting when the business within Wisconsin is not an integral part of a unitary business. However, the Department of Revenue must approve this method, and the department will permit it only when satisfied that allocation and separate accounting will properly reflect the income taxable by Wisconsin.

Step 2 – Apportionment (when allocation is not permissible). When allocation and separate accounting are not permissible, the determination is made by formula apportionment. For all businesses except air carriers, financial organizations, telecommunications companies, pipeline companies, public utilities, railroads, and car line companies, the taxpayer first deducts from total net income the portion (less related expenses) that follows the situs of the property or the residence of the recipient. The remaining net income is then apportioned using a formula based on the business's presence in Wisconsin.

Source: Wis. Stat. § 71.04(4)

## Partnership and LLC Income: Attributable-Activity Rule

Nonresident partners and members of limited liability companies recognize their proportionate share of all items of income, loss, or deduction attributable to a business in, services performed in, or rental of property in Wisconsin. This is a facts-and-activities sourcing rule, not a statutory-allocation rule. Partnership or LLC agreements cannot override this sourcing principle; Wisconsin statute § 71.04(3)(c) requires partners and members to disregard, for Wisconsin sourcing purposes, any provisions in partnership or LLC agreements that characterize payments as services or capital, that allocate income from Wisconsin sources to out-of-state sources, or that allocate a disproportionate share of Wisconsin-source losses to a partner or member.

Source: Wis. Stat. § 71.04(3) and § 71.04(4m)

## S Corporation (Tax-Option Corporation) Income

Nonresidents deriving income from a Wisconsin tax-option corporation (S corporation) that is engaged in business within and outside Wisconsin are taxed only on the income of the corporation derived from business transacted and property located in Wisconsin. Losses and other deductible items of the corporation are likewise limited to the shareholder's proportionate share of the Wisconsin loss or other item. For sourcing purposes, all intangible income of tax-option corporations passed through to shareholders is treated as business income that follows the situs of the business, not the residence of the shareholder.

Source: Wis. Stat. § 71.04(9)

## Specific Sourcing Rules for Selected Income Types

Gambling winnings. Income from winnings from a casino or bingo hall located in Wisconsin and operated by a Native American tribe or band follows the situs of the casino or bingo hall and is taxable by Wisconsin to nonresidents. Lottery winnings from tickets purchased in Wisconsin are also allocated to Wisconsin.

Covenants not to compete. Income derived by a nonresident from a covenant not to compete is taxable by Wisconsin to the extent the covenant was based on a Wisconsin-based activity.

Intangible income (interest, dividends, capital gains from securities). All other income or loss of nonresident individuals and nonresident estates and trusts, including income or loss derived from land contracts, mortgages, stocks, bonds, and securities or from the sale of similar intangible personal property, follows the residence of the taxpayer, not the location of the payor or the underlying property. Such income is generally not taxable by Wisconsin when received by a nonresident, except that lottery-prize income from winning tickets originally purchased in Wisconsin is allocated to Wisconsin.

Real property. Gain or loss from the sale of Wisconsin real property is Wisconsin-source income for a nonresident. Rental income from Wisconsin real property is likewise Wisconsin-source income.

Source: Wis. Stat. § 71.04(1)(a) and (b)

## Reciprocity Agreements

Wisconsin has income tax reciprocity agreements with Illinois, Indiana, Kentucky, and Michigan. Under these agreements, a resident of one of these four states who works in Wisconsin but does not maintain domicile in Wisconsin is not subject to Wisconsin income tax on wage and salary income. The employee must complete Wisconsin Form W-220 (Nonresident Employee's Withholding Reciprocity Declaration) and submit it to the employer to prevent Wisconsin withholding. Reciprocity applies only to wage and salary income; it does not apply to self-employment income, partnership income, or gambling winnings.

Source: Wisconsin DOR Publication 122, Tax Information for Part-Year Residents and Nonresidents