Individual Income Tax
Part-Year and Nonresidents

  1. Must I file a Wisconsin income tax return?
  2. What income does Wisconsin tax?
  3. I am a nonresident of Wisconsin. I sold real estate located in Wisconsin. Do I have to report the sale of this property to Wisconsin?
  4. I am a nonresident of Wisconsin. I won $5,000 from the Wisconsin Lottery. Am I subject to Wisconsin income tax?
  5. I am a nonresident of Wisconsin. I won $500 in the Wisconsin Lottery. I have no other gross income taxable by Wisconsin. Am I subject to Wisconsin income tax?
  6. I am a nonresident of Wisconsin. I purchased a Powerball ticket in Wisconsin and won two million dollars. Am I subject to Wisconsin income tax?
  7. I am a nonresident of Wisconsin. How do I determine my Wisconsin income from my sole proprietorship that does business within and without Wisconsin (reported on Form 1NPR, line 6, column B)?

  1. Must I file a Wisconsin income tax return?

    If you are a nonresident or part-year resident of Wisconsin and your Wisconsin gross income (or the combined gross income of you and your spouse) is $2,000 or more, you must file a Form 1NPR, Nonresident and Part-Year Resident Income Tax Return. The 1NPR and instructions can be downloaded from our website at revenue.wi.gov.

    Gross income means all income (before deducting expenses) reportable to Wisconsin which you received in the form of money, property, or services. It does not include items that are exempt from Wisconsin income tax, such as U.S. government interest.

    Note: Even if you do not have to file, if you had Wisconsin income tax withheld from your wages or you paid estimated tax, you should file a Wisconsin return since this is the only way to get a refund.

    For more detailed information see Publication 122, Tax Information for Part-Year and Nonresidents of Wisconsin. In addition, see the Form 1NPR instructions.

  2. What income does Wisconsin tax?

    Nonresidents - Wisconsin taxes only your income from Wisconsin sources.

    Part-year residents - During the time you are a Wisconsin resident, Wisconsin taxes your income from all sources. During the time you are not a resident of Wisconsin, Wisconsin only taxes your income from Wisconsin sources.

  3. I am a nonresident of Wisconsin. I sold real estate located in Wisconsin. Do I have to report the sale of this property to Wisconsin?

    Yes, any gain or loss from the sale of real estate located in Wisconsin must be reported to Wisconsin regardless of the owner's state of residence. For more information on how to report this income, see the Wisconsin Form 1NPR instructions.

    Unless the gain is reported on the installment basis, payment of estimated tax is due on the gain from the sale at the date of the sale and not when the taxpayer receives the sale proceeds. This applies even if the nonresident taxpayer had no Wisconsin filing requirement the previous year. Payments should be made with Form 1-ES, Wisconsin Estimated Income Tax Voucher for the taxable year. In addition, see the Form 1-ES instructions.

  4. I am a nonresident of Wisconsin. I won $5,000 from the Wisconsin Lottery. Am I subject to Wisconsin income tax?

    Yes. A nonresident of Wisconsin is taxed on lottery winnings from the Wisconsin Lottery. Since you have Wisconsin gross income, including any Wisconsin lottery winnings, of $2,000 or more, you are required to file a Wisconsin income tax return and pay Wisconsin income tax on the lottery winnings.

  5. I am a nonresident of Wisconsin. I won $500 in the Wisconsin Lottery. I have no other gross income taxable by Wisconsin. Am I subject to Wisconsin income tax?

    Although the winnings are taxable for federal and Wisconsin income tax purposes, you are not required to file a Wisconsin income tax return and report the taxable lottery winnings because your Wisconsin gross income is less than $2,000 for the year.

  6. I am a nonresident of Wisconsin. I purchased a Powerball ticket in Wisconsin and won two million dollars. Am I subject to Wisconsin income tax?

    Yes. A nonresident of Wisconsin is taxed on winnings from a multi-jurisdictional lottery, such as Powerball, if the multi-jurisdictional lottery ticket was purchased from a retailer in Wisconsin. Since you have Wisconsin gross income, including lottery winnings, of $2,000 or more, you are required to file a Wisconsin income tax return and pay Wisconsin income tax on the lottery winnings.

    For more detailed information, please see Publication 600, Wisconsin Taxation of Lottery Winnings.

  7. I am a nonresident of Wisconsin. How do I determine my Wisconsin income from my sole proprietorship that does business within and without Wisconsin (reported on Form 1NPR, line 6, column B)?

    Step 1: Determine whether apportionment or separate accounting applies.

    Nonresident individuals conducting business within and without Wisconsin are taxed only on income derived in Wisconsin. This includes:

    • Income derived from property located in Wisconsin
    • Income derived from business transacted in Wisconsin
    • Income derived from personal services performed in Wisconsin

    The apportionment method must be used unless the department gives permission to use separate accounting.

    Note: It is very rare that a sole proprietorship would qualify for separate accounting; most use the apportionment method.

    • If you must use the apportionment method, go to Step 2.
    • If you have permission from the department to use separate accounting or wish to obtain permission, go to Step 4.

    Step 2: Determine which apportionment method applies.

    Under the apportionment method, a business shows all of its income and deductions attributable to the business and assigns a part to Wisconsin according to an apportionment percentage. Sole proprietorships that use the single sales factor method use Part I of Form 4A-1, Wisconsin Apportionment Data for Single Factor Formulas, to compute their apportionment percentage. See the instructions for Form 4A-1.

    The following business types must file a Form 4A-2, Wisconsin Apportionment Data for Multiple Factor Formulas and use an alternative method of computing their apportionment percentage. See the instructions for Form 4A-2.

    • Direct air carriers (Part I-A)
    • Motor carriers (Part I-B)
    • Railroads and sleeping car companies (Part I-C)
    • Pipeline companies (Part I-D)
    • Telecommunications companies (Part I-E)

    Note: The vast majority of sole proprietorships use the single sales factor method; however, an example of a sole proprietorship that must use an alternative method is a motor carrier.

    • For single sales factor method, fill out the Form 4A-1 and go to Step 3.
    • For an alternative method, fill out the Form 4A-2 and go to Step 3.

    Step 3: Determine if the sole proprietorship has nonapportionable income.

    A sole proprietorship that is required to use apportionment may also have nonapportionable income. Nonapportionable income is income which is allocable directly to a particular state. It includes income or loss derived from the sale of nonbusiness real or tangible personal property or from rentals and royalties from nonbusiness real or tangible personal property. This income is assigned to the state where the property is located. Nonapportionable income also includes income that is realized from the sale of or purchase and subsequent sale or redemption of lottery prizes if the winning tickets were originally bought in Wisconsin. Use Form 4N, Wisconsin Nonapportionable and Separately Apportioned Income, and its instructions to report this income.

    • If your business has nonapportionable income, fill out the Form 4N and go to Step 5.
    • If your business does not have nonapportionable income, go to Step 5.

    Step 4: Information for separate accounting filers.

    A sole proprietorship that has income or loss from a business outside Wisconsin that is not part of a unitary business cannot use apportionment. Instead, it must determine the income attributable to Wisconsin by separate accounting. Under separate accounting, the sole proprietorship must keep separate records of the sales, cost of sales, and expenses for the Wisconsin business.

    A unitary business may use separate accounting only with the approval of the department. In your letter requesting approval, you must explain, in detail, why separate accounting more clearly reflects your Wisconsin income. Mail your letter to the Audit Bureau, Wisconsin Department of Revenue, Mail Stop 5-144, PO Box 8906, Madison, WI 53708-8906 before the end of the taxable year for which the use of separate accounting is desired. For more information, see Form 4C, Wisconsin Allocation and Separate Accounting Data, and its instructions.

    • If your business has permission from the department to use separate accounting, fill out the Form 4C. Amounts from this form flow to the Form 4N; go to Step 3 to complete this form at this time.
    • If your business does not have permission from the department to use separate accounting, go to Step 2 to determine your apportionment method.

    Step 5: Calculate your Form 1NPR, line 6, column B, Wisconsin income from a sole proprietorship.

    1. Federal income from your sole proprietorship from Form 1NPR, line 6, column A. ________.00
    2. Total company net nonapportionable and separately apportioned income
    (from Form 4N, line 8).
    ________.00
    3. Subtract line 2 from line 1. This amount is your apportionable income. ________.00
    4. Wisconsin apportionment percentage:
    • If you completed Form 4A-1 for your apportionment, fill in the
      percentage from Form 4A-1, line 17.
    • If you completed Form 4A-2 for your apportionment, fill in the
      percentage from the appropriate line.




    _ _ _._ _ _ _%
    5. Multiply line 3 by line 4. ________.00
    6. Wisconsin net nonapportionable and separately apportioned income
    (from Form 4N, line 14).
    ________.00
    7. Add lines 5 and 6. This amount is your Wisconsin income from your
    sole proprietorship; enter this amount on your Form 1NPR, line 6, column B.
    ________.00

    Attach copies of the Form 4A-1, Form 4A-2, Form 4N, and Form 4C to your tax return as appropriate. Include a schedule showing any calculations you made to arrive at your Wisconsin business income.

    These instructions reference the 2013 forms; they are meant as a guide and may not cover every situation. If you have questions about your business' facts and circumstances, contact the department's Corporation Franchise/Income Audit and Technical Assistance Unit at (608) 266-1143 or by email at DORFranchise@revenue.wi.gov.

FOR MORE INFORMATION PLEASE CONTACT:

WISCONSIN DEPARTMENT OF REVENUE
Customer Service Bureau
PO Box 8949
Madison, WI 53708-8949
Phone: (608) 266-2486
Fax: (608) 267-1030
Email additional questions to DORIncome@revenue.wi.gov

November 18, 2013