Individual Income Tax Working in Another State

  1. I am a resident of Wisconsin. Do I have to include the income I earned in another state on my Wisconsin tax return?

  2. What is reciprocity, and which states have reciprocity with Wisconsin?


  1. I am a resident of Wisconsin. Do I have to include the income I earned in another state on my Wisconsin tax return?

    Yes. All income received by a Wisconsin resident is reportable to Wisconsin regardless of where it is earned. Wisconsin allows a credit for the net income tax you pay to other states on income that is taxed by both Wisconsin and the other state. In order to claim this credit, you must:

    • File an income tax return with the other state to determine the amount of net tax paid to that state.
    • File Wisconsin Form 1.
    • Attach a copy of the other state's income tax return.
    • Attach Wisconsin Schedule OS, Credit for Net Tax Paid to Another State.
    • Attach your Form W-2 (wage statement) or other withholding statement from the other state.


    Effective for taxable years beginning on or after January 1, 2017, a new limitation applies to the credit. The credit cannot exceed the lesser of:


    1. Your Wisconsin net tax liability,
    2. The amount of tax paid to the other state, or
    3. The amount of Wisconsin tax paid on the income subject to tax in the other state.

    Note: The third limitation does not apply to income that is taxed by Minnesota, Illinois, Iowa, or Michigan.

    See the Schedule OS or Wisconsin Publication 125, Credit for Tax Paid to Another State, for further details.

  2. What is reciprocity, and which states have reciprocity with Wisconsin?

    Wisconsin currently has reciprocity agreements with four states: Illinois, Indiana, Kentucky, and Michigan. These agreements, provide that residents of these states working in Wisconsin will be taxed on income earned as an employee by their home state, and not by Wisconsin. Conversely, Wisconsin will tax Wisconsin residents working in one of these states and the other state will not tax the income earned as an employee by Wisconsin residents who are employed in that state. Reciprocity applies only to income earned as an employee. Income earned as an employee generally includes salaries, wages, commissions, and fees. Reciprocity does not apply to other types of income, such as gains on the sale of property, rental income, and lottery winnings. For more information on Wisconsin's reciprocity agreements, see Publication 121, Reciprocity.

FOR MORE INFORMATION PLEASE CONTACT:

MS 5-77
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@wisconsin.gov

​December 15, 2017