2026 tax year · cross-border wages
Crossing a state line into or out of Wisconsin
Wisconsin taxes its residents on income earned anywhere, and taxes non-residents on work done inside it. Which return you file depends on which direction you commute.
Wisconsin borders 6 states. They fall into 2 different situations, and which one applies decides whether you file one return or two.
Where Wisconsin has a reciprocity agreement
Wisconsin has wage reciprocity with Illinois, Indiana, Kentucky and Michigan. Work in one of these and it will not tax your wages at all: you file its exemption certificate with your employer there, which stops its withholding, and report everything to Wisconsin. There is no nonresident return.
| Work state | Exemption certificate | Its tax on your wages |
|---|---|---|
| Illinois | IL-W-5-NR | $0 |
| Indiana | WH-47 | $0 |
| Kentucky | 42A809 | $0 |
| Michigan | MI-W4 | $0 |
Kentucky attaches conditions to its agreements, not all of which apply to every partner state: Virginia residents must commute daily; Ohio residents cannot own 20%+ of an S corporation. Check which clause covers a Wisconsin resident before relying on it.
Reciprocity covers wages paid by an employer. It does not cover self-employment income, so a 1099 worker in Wisconsin generally still sources income to where the work was done.
Where you file a nonresident return and claim a credit
Wisconsin has no agreement with Iowa and Minnesota. Work in one of these and you file a nonresident return there, report the same income again to Wisconsin, and claim a credit for what you already paid. The credit is capped at your Wisconsin liability, so you are not taxed twice, the combined bill lands at roughly the higher of the two rates. On $70,000, Minnesota costs the most at $4,292 and Iowa the least at $3,323, $969 between them.
| Work state | Its tax | Wisconsin after credit | Total | Rate that governs |
|---|---|---|---|---|
| Iowa | $2,660 | $663 | $3,323 | Wisconsin |
| Minnesota | $4,292 | $0 | $4,292 | Minnesota |
What Wisconsin itself takes across a salary range
A single filer, taking the standard deduction. This is the figure every arrangement above is measured against, the tax Wisconsin charges a resident, whether the work happened inside the state or over a line:
| Wages | Wisconsin tax | Effective rate |
|---|---|---|
| $45,000 | $1,998 | 4.44% |
| $70,000 | $3,323 | 4.75% |
| $120,000 | $5,973 | 4.98% |
What Wisconsin charges as your home state
Wisconsin taxes income on 4 graduated brackets for 2026, from 3.5% up to 7.65%. Because wages stacks on top of any other income, a second source can push part of it into the next bracket.
Wisconsin is a community property state. In community property states, income earned during marriage is generally owned equally by both spouses. This affects QJV eligibility, MFS filing strategies, and retirement account contribution rules.
State income tax on wages only, 2026 rates. Not tax advice, what this does and doesn't cover.