Wisconsin State Taxes

Get your cheese and Packers jokes out of the way, fellas, because today we’re looking at the Badger State’s taxes and how they can apply to you. Most major state taxes are administered by the Wisconsin Department of Revenue, except property taxes which are local levies.

Who Pays Wisconsin State Taxes

Wisconsin’s individual income tax brings in over half of the state’s total tax revenue, so it’s a big deal, and it applies to more people than you might think. The tax is administered by the Wisconsin Department of Revenue and applies to full-year residents, part-year residents, and even nonresidents who have income from Wisconsin sources.

If you’re a full-year resident, all your income is taxed, regardless of where it was earned. If you’re a nonresident, only your Wisconsin-sourced income is taxed. And if you lived in Wisconsin for only part of the year, you’re taxed on all income earned while you were a resident and only your Wisconsin income during the time you lived elsewhere.

What Counts as Taxable Income in Wisconsin

Wisconsin taxable income includes a broad range of earnings. This covers wages, salaries, and commissions, but it doesn’t stop there. If you’re earning rent or royalties from property located in Wisconsin, making money from selling or exchanging tangible property located in the state, or running a business or farm in Wisconsin, those earnings are all taxable.

Other examples include winnings from the Wisconsin state lottery, casino or bingo halls operated by Native American tribes, and income earned from any type of non-compete agreement based on activities in the state. Basically, if it touches Wisconsin soil and puts money in your pocket, it’s safe to assume that it counts.

Who Needs to File a Tax Return

Whether or not you need to file depends on your filing status, age, and gross income. Wisconsin recognizes four filing statuses: single, married filing jointly, married filing separately, and head of household (no surprises there). You should file under the status that applies to you, and if more than one fits, you’re allowed to pick the one that results in the lowest tax.

The gross income thresholds vary slightly by age and status. For example, single filers under 65 must file if they earn $10,140 or more. If you’re married and filing jointly, both under 65, the threshold is $18,410. For those 65 or older, those numbers increase slightly. Gross income means the total amount you made—before expenses or deductions—and can include money, property, or services.

Other Situations That Require Filing

Even if you don’t meet the income thresholds, there are other reasons you might still need to file a Wisconsin return. If someone else can claim you as a dependent and you had more than $950 in income that included at least $301 in unearned income (like interest or dividends), you need to file.

You’ll also need to file if you received advance earned income credit from your employer, owe any tax penalties on retirement accounts or savings plans, or had gross income of $2,000 or more as a part-year or nonresident in 2009.

When You Should File Just to Get a Refund

Even if you’re not technically required to file, it might be worth doing so if you expect a refund. If you had Wisconsin taxes withheld from your paycheck, made estimated payments during the year, or qualify for the Earned Income Credit, you can only get that money back if you file a return.

Tax Rates by Filing Status

Wisconsin’s income tax is progressive, which means your rate goes up as your income does. There are different brackets depending on your filing status.

For single filers and heads of household, rates start at 4.60% on income up to $10,220, and increase through five brackets, topping out at 7.75% on income over $225,000.

Married couples filing jointly start at 4.60% on the first $13,620 of income, moving up to 7.75% for income over $300,000.

If you’re married but filing separately, you’ll see the same rate progression, but with lower bracket thresholds; starting at 4.60% on the first $6,810 and hitting the top rate of 7.75% for income over $150,000.

When to File and Pay

Your Wisconsin state tax return is due on April 15, just like your federal return. If you get an extension for the federal return, Wisconsin automatically honors that, too. However, even with an extension, you still need to pay any tax due by April 15 to avoid penalties or interest.

Estimated Tax Payments

If you expect to owe more than $200 on your Wisconsin taxes, you may need to make estimated tax payments. This rule applies to residents, part-year residents, and nonresidents alike. These payments are usually made in four equal installments; on April 15, June 15, September 15, and January 15 of the following year.

Other Types of Wisconsin State Tax

Wisconsin Corporate Tax

Corporations with business activity in Wisconsin are subject to either the corporate income tax or the corporate franchise tax. The corporate income tax has a rate of 7.9% on net income. The corporate franchise tax also has a rate of 7.9%, for the privilege of doing business in Wisconsin.

Wisconsin Sales and Use Tax

Wisconsin’s statewide sales tax rate is 5%. This tax applies to the total amount (gross receipts) that retailers earn from selling or leasing taxable goods and services within the state. So, if you’re shopping in a store or buying something taxable from a Wisconsin-based business, the seller typically adds this tax to your bill and sends it to the state.

Use tax is a bit different, even though the rate is also 5%. Use tax kicks in when you buy something without being charged Wisconsin sales tax, like when you order a taxable item online or from an out-of-state seller. If no sales tax was collected at the time of purchase, Wisconsin expects you to pay the equivalent use tax when you use, store, or consume that item in the state.

On top of the state’s 5% rate, many Wisconsin counties have adopted a local 0.5% county tax, which applies to both sales and use tax. That means in most counties, the combined tax rate is 5.5%, whether you’re paying it at the register or later through use tax. Good to keep in mind if you’re planning a long stay or moving to Wisconsin.

Wisconsin Property Tax

Property taxes are mainly enforced on the local level and provide a major source of revenue for municipal governments, school districts, and special purpose districts.

Other Wisconsin State Taxes

Other smaller taxes include a gasoline tax ($0.329 per gallon), cigarette tax ($2.52 per pack), and alcoholic beverage taxes ($3.25 per gallon of liquor, $0.25 per gallon of wine, and $0.06 per gallon of beer).

Wisconsin State Tax Forms

Form 1: (Wisconsin Income Tax Return ‘ Long Form)
Form 1A: (Wisconsin Income Tax Return ‘ Short Form)
Form WI-Z: (Wisconsin Income Tax Return ‘ Easy Form)
Form 1NPR: (Wisconsin Nonresident and Part-Year Resident Income Tax Return)
Form 1-ES: (Wisconsin Estimated Income Tax Voucher)
Form 1X: (Amended Return ‘ Wisconsin Income Tax)
Form 4: (Wisconsin Corporation Franchise or Income Tax Return)
Schedule H: (Wisconsin Homestead Credit Claim)

The Final Word on Wisconsin State Taxes…

We get that Wisconsin state taxes might not be the most thrilling topic, but they’re definitely something worth understanding if you live, work, or do business in the state. From income taxes to sales and use tax, the rules can vary depending on where you live, how much you earn, and even where you shop.

But there’s good news! Most of it is pretty straightforward once you break it down. As long as you know your filing status, keep track of your income, and stay on top of important deadlines, you’re already ahead of the game. And hey, if things get complicated, there’s no shame in getting a little help from a tax pro or using online resources (like the ones hosted on yours truly).

Wisconsin State Tax Resources

• Wisconsin Department of Revenue (DOR): www.revenue.wi.gov
• Wisconsin state tax forms and publications: www.revenue.wi.gov/formpub
• WI Department of Revenue ‘Individuals’ portal: www.revenue.wi.gov/indiv
• Wisconsin DOR ‘Online Services’ center: revenue.wi.gov/Pages/OnlineServices/home.aspx
• Wisconsin e-File: www.revenue.wi.gov/wi_efile
• Wisconsin DOR ‘Electronic Funds Transfer (EFT)’ for paying taxes online: www.revenue.wi.gov/Pages/WI-efile/home.aspx
• Check the status of your WI state tax refund: www.revenue.wi.gov/Pages/Apps/TaxReturnStatus.aspx
• Property Assessment Appeal Guide for Wisconsin Property Owners: www.revenue.wi.gov/pubs/slf/pb055
• Contact the WI Department of Revenue: revenue.wi.gov/Pages/ContactUs/home.aspx

 

Wisconsin State Taxes: FAQ

1. Who needs to file a Wisconsin state tax return?
If you lived in Wisconsin for the entire year and earned above a certain income threshold, you’ll likely need to file a state return. The exact amount depends on your filing status, age, and income. Even if you didn’t make much, you might still want to file if you’re eligible for a refund or a credit like the Homestead Credit. If you were only a resident for part of the year or earned money in Wisconsin while living elsewhere, you might still need to file using Form 1NPR.

2. What is the difference between Form 1 and Form 1NPR?
Form 1 is the standard income tax return for full-year residents of Wisconsin. If you lived in Wisconsin for all of the tax year, this is the form you’ll use to report your income and claim credits or deductions. Form 1NPR is for nonresidents or part-year residents. You’ll use it if you moved into or out of Wisconsin during the year or if you live in another state but earned money in Wisconsin.

3. Are there any tax credits available for Wisconsin residents?
Yes, Wisconsin offers several tax credits that can help reduce your tax bill. One of the most popular is the Homestead Credit, which helps people with lower incomes who pay rent or property taxes. There’s also a credit for married couples who both work, as well as credits for school property tax and college tuition. Each credit has its own rules and income limits, so it’s worth reviewing the qualifications before filing.

4. How do I file my Wisconsin state taxes online?
You can e-file your Wisconsin state taxes through the Department of Revenue’s online portal called My Tax Account. It’s free, secure, and user-friendly. If you’re filing both federal and state returns together, most commercial tax software will include the Wisconsin return in your filing package. Whether you do it yourself or go through a preparer, electronic filing is the fastest way to get your refund.

5. Does Wisconsin tax Social Security or retirement income?
Wisconsin does not tax Social Security benefits if they’re already exempt from federal income tax. For retirement income like pensions or IRA distributions, it depends on the type of account and the amount. Some government pensions are fully or partially exempt, and there are exclusions available for retirees over a certain age. The rules can get a little technical here, so it’s a good idea to double-check whether your specific retirement income is taxable in Wisconsin.

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