Wisconsin state income tax
In Wisconsin, the income tax payers are placed into four categories with respect to their income, and are imposed income tax whose rates vary from 4.6% to 6.75% among each group. For Wisconsin tax purposes, gross income of individuals is defined as the total earnings that are to be reported to the state before subtracting the expenses reportable to Wisconsin.
Amount of tax payable for each group:
- Single taxpayers: They are to pay a tax of 4.6% on their first $9,160 of their income subject to tax, 6.15% for $9,161 and $18,320, 6.75% for $18,321 and $137,410, and for the amount exceeding $137,410, the imposed tax rate is 6.75%.
- Married taxpayers: married taxpayers who intend to file jointly, are to pay tax at a rate of 4.6% for the first $12,210 of taxable income ; 6.15% for the income between $12,211 and $24,430; 6.5% for that between $24,431 and $183,210; and for the amount over $183,211, at the rate of 6.75%.
- Part-year residents and non-residents: All non-residents and part year residents whose gross income is more than $2,000 are to file a Wisconsin state income tax return.
- Retired persons: For full year and part-year residents, usually the pension and annuity income that is taxable in Wisconsin is the same as that which is subjected to federal tax. For part-year residents, the money received when residing in Wisconsin is exempt from the state income tax.For non residents, the pension and annuity income are free of Wisconsin income tax.
Date of filing and extension:
The due date of filing the Wisconsin return is April 15, or the next working day if it falls on a holiday or Sunday.The following options for extension of the date of filing are allowed.
- An automatic extension of six months for the date of filing is allowed if you are eligible for a federal income tax extension. You don't need to apply for this separately.
- An automatic Wisconsin extension is allowed also if you are granted a federal extension of two months because of the fact that you will be out of US and Puerto Rico on the 15th of April.
- Filing extensions permissible by the federal law may be applicable to Wisconsin tax matters even in case you dont need a federal extension. To get a Wisconsin extension alone, you must indicate the same in your Wisconsin return.
Payment options:
- Using credit card: All persons who filed an individual return last year, all business taxpayers who file returns and make bill payments, and those who have received a tax overdue notice, can make their tax payments using their credit card.
- Direct debit withdrawal: This is a free payment service option open to the electronic filers only, through either the Wisconsin Free-file service or the federal or state program.
- By check: Electronic filers may send the check along with Electronic Payment Voucher to the address shown below :
Wisconsin Department of Revenue
P.O.Box 2942
Milwaukee, WI 53201-2942
Tax benefits:Earned income credit: This is a tax benefit for selected working families having at least one child who qualifies for the scheme. It is based on the percentage of the federal credit. This is a refundable benefit and those workers whose income is not enough to be eligible for the state taxes to be withheld, can also obtain the credit.
Homestead credit: To receive homestead credit, you should meet the following requirements :
1. You should have been a full year resident of Wisconsin, and of or above the age of 18.
2. There should be no claims of you being a dependent of another persons federal return.
3. Your family income must be below $24,500 for the year.
4. You must have owned or rented your Wisconsin homestead (Homestead is the home you live in plus up to an acre of land adjoining it during the year.)
Historic rehabilitation tax credit: This is available for selected rehabilitation activities. After contacting the Wisconsin Historical society, you have to get your project approved before you can actually start working on it. Usually, work done according to the set criteria after receiving due permission will be eligible for the credit, the amount of which depends on the limitations of expenses for the particular project.
Amended returns:The amended returns are to be filed inside 4 years of the actual due date of return. Full-year residents must use Form IX for the year that is amended, while non-residents and part-year residents are to use Form 1NPR for the purpose.
Tax preparers: Approved tax preparers use electronic method for sending tax returns to the Internal Revenue Service (IRS).The IRS then sends the state return to the state revenue department of Wisconsin (DOR) for further action.While selecting your tax professional, ensure that he/she is authorized to render electronic filing facilities by the state and federal revenue authorities.Also check whether he/she is a part of the federal or state electronic filing program and also whether the software package that he/she uses includes Wisconsin.
Penalties and interests: Delayed returns may be imposed penalties of $2 for a net tax amount less than $10; $3 if the amount is between $10 and $20; $5 if the net tax amount is $20 or greater and $30 for the returns that is delayed beyond 60 days. A negligence penalty at a monthly rate of 5% up to an upper limit of 25% will be charged for not filing the returns on time.
Delinquent interest is charged at a monthly rate of 1.5% (annual rate of 18%). The interest charged in an extension period is at a monthly rate of 1% (annual rate of 12%).
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