Wisconsin Tax and CPA Services: State, County and City Taxes

Wisconsin borders northern Illinois, and workers who live in one state and work in the other are covered by a wage reciprocity agreement. It removes most of the double-tax worry, but it covers less than people assume. This page explains Wisconsin's income tax, its entity-level tax election, an unusual sales tax in Milwaukee, and how property tax works, for residents, commuters and businesses.

Income tax for residents and part-year residents

Wisconsin has its own list of subtractions and credits. The 2025 Form 1 instructions put the top rate at 7.65% for 2025, reached at $323,290 of taxable income for single and head-of-household filers and $431,060 for joint filers. The 2025 return was due April 15, 2026.

Retirement rules changed for 2025. The instructions list a new subtraction of up to $24,000 for people at least 67 years old at the end of 2025, claimed on Schedule SB, in addition to a separate $5,000 subtraction restricted by income. Wisconsin exempts Social Security benefits from its tax. See Social Security benefits taxation for the federal side.

Part-year residents and nonresidents with Wisconsin income file Form 1NPR, and a nonresident must file when Wisconsin-source gross income is $2,000 or more. The state's WisTax system does not support Form 1NPR, so e-filing goes through software or a preparer.

Illinois reciprocity and its limits

Under Publication 121, Wisconsin generally does not tax wages of employees domiciled in Illinois, Indiana, Kentucky or Michigan who work in Wisconsin, and those states do not tax wages of Wisconsin domiciliaries who work there. Details to know:

• Wages only: Reciprocity does not reach self-employment income, rental income, gains or income from pass-through entities. An Illinois resident with a Wisconsin consulting practice still files in Wisconsin.
• Form W-220: An Illinois resident working in Wisconsin gives the employer this declaration to stop Wisconsin withholding.
• Refunds: If tax was withheld anyway, a Form 1NPR claims it back.
• No credit: A Wisconsin resident working in Illinois cannot claim a credit for Illinois tax on reciprocal wages; the Illinois wage withholding is refunded through an Illinois return.

Illinois-side questions are covered on our Illinois page and for Chicagoland.

Business taxes and entity-level election

Partnerships and S corporations can elect to pay Wisconsin tax at the entity level. For partnerships, the state's guidance taxes net income reportable to Wisconsin at 7.9%, and the election is made each year on Form 3 by the extended due date. Owners then leave the income off their own Wisconsin returns. Losses and some deductions do not pass through, so run the numbers first.

Nonresident owners of pass-through entities are otherwise subject to withholding, with an exemption below $2,000 of Wisconsin income.

Publication 123 describes the manufacturing and agriculture credit: 7.5% of qualified production activities income from property assessed as manufacturing or agricultural. Annual reports go to the Department of Financial Institutions (DFI), which lists a $40 fee for domestic LLCs and corporations, or $25 if filed online.

Sales and use tax: Milwaukee and the counties

The state rate is 5%. DOR's rate page counts seventy counties with a 0.5% county tax and notes that Manitowoc and Racine counties began theirs in 2025. Milwaukee County's rate rose to 0.9% on January 1, 2024, and the City of Milwaukee, the only Wisconsin city with its own sales tax, charges 2%, for 7.9% combined inside the city. Premier resort area and other special-district taxes also exist, so use DOR's rate lookup for each address.

Remote sellers must collect when gross sales into Wisconsin exceed $100,000 in the previous or current calendar year; the old 200-transaction test was removed in 2021. See sales and use tax.

Property tax: local assessors and credits

Wisconsin does not use county assessors. Under the property owner guide, a municipal assessor values most property at market value as of January 1, appeals go to the local Board of Review, and the Department of Revenue itself assesses manufacturing property. Tax bills can show a first dollar credit and a lottery and gaming credit.

Payroll in Wisconsin

Employers register with the Department of Revenue for withholding, using its My Tax Account portal, and with the Department of Workforce Development (DWD) for unemployment insurance. Check DWD's current tax rate table for the wage base and rate. Wisconsin's family and medical leave law provides unpaid leave by default at employers with at least 50 permanent employees. See multi-state payroll.

How we can help

Because our office is in Naperville, we look at Wisconsin and Illinois together. We can confirm that the right state is withholding, prepare Form 1NPR claims, split income correctly between reciprocal wages and other income, and decide whether the entity-level tax suits a business with Wisconsin owners. Our multi-state tax service also covers remote workers and H-1B or NRI taxpayers who change states mid-year, and retirees weighing the 2025 subtraction.

Frequently asked questions

General information only, not tax, legal or accounting advice for your situation. Rules, limits and deadlines change; confirm the current rules with the official source or a qualified professional before you act. Reading this page does not create a professional relationship with CPA Tax Payroll and Accounting Corp.