Tax 2.02(5)(a)(a) Personal service income included under reciprocity agreements is taxed by an employee's state of residence rather than by an employee's state of employment. Wisconsin will not tax personal service income earned in Wisconsin by residents of states with which Wisconsin has reciprocity, and those states may not tax personal service income which a Wisconsin resident earns in those states, except as described in subs.
(6),
(7), and
(8).
Tax 2.02(5)(b)
(b) For personal service income included under reciprocity agreements, an employer need only withhold income tax for the state of residence of an employee.
Tax 2.02(5)(c)
(c) Federal law regulates withholding on wages earned by employees engaged in interstate transportation activities.
Tax 2.02 Note
Note: Additional information on withholding on wages earned by employees engaged in interstate transportation activities may be obtained by writing to Wisconsin Department of Revenue, Compliance Bureau, P.O. Box 8902, Madison, WI 53708.
Tax 2.02(6)(a)
(a) The reciprocity agreement with Illinois is limited to “wages, salaries, commissions, and any other form of remuneration paid to employees for personal services." However, the agreement does not extend to fees of lawyers, accountants and other self-employed persons deriving personal service income, to lottery winnings, or to persons identified in pars.
(c) and
(d).
Tax 2.02(6)(b)
(b) The Illinois Income Tax Act, Article 15, section 1501 (a) (20), defines a resident as
“an individual (i) who is in this State for other than a temporary or transitory purpose during the taxable year; or (ii) who is domiciled in this State but is absent from the State for a temporary or transitory purpose during the taxable year." Because of the differences in the definition of resident for Illinois and Wisconsin purposes, a person domiciled in Wisconsin may simultaneously be a resident of Illinois, or a person may be domiciled in Illinois but not be a resident of Illinois.
Tax 2.02 Note
Example: A person is domiciled in Wisconsin and takes a job in Illinois. The person does not intend to give up his or her Wisconsin domicile, but instead intends to return to Wisconsin once his or her job in Illinois is completed, in 2 to 3 years. Assume that Illinois considers the person's stay in Illinois as other than temporary or transitory. Therefore, the person is a resident of Illinois. The person is also a resident of Wisconsin because he or she is still domiciled in Wisconsin.
Tax 2.02 Note
Note: The term “temporary or transitory" as used in the definition of an Illinois resident set forth in sub. (6) (b) is not defined in either Illinois law or regulations. Therefore, whether or not the purpose for which an individual is in, or is absent from, Illinois is temporary or transitory in character depends upon the facts and circumstances of each particular case.
Tax 2.02(6)(c)
(c) The reciprocity agreement with Illinois does not apply to any form of compensation described in par.
(a) paid on or after January 1, 1974 to any individual who, at the time of payment, is simultaneously a resident of Illinois and a domiciliary of Wisconsin. All income of this person is taxable by Wisconsin. However, a credit against Wisconsin income tax may be claimed for income tax paid to Illinois.
Tax 2.02(6)(d)
(d) An individual who is domiciled in Illinois but is not a resident of Illinois is subject to the Wisconsin income tax on income earned in Wisconsin.
Tax 2.02(7)
(7)
Provisions of agreement with Michigan. The reciprocity agreement with Michigan is limited to income from “personal services, including salaries, wages or commissions." The agreement does not include income which Michigan considers to be “business income," such as fees of self-employed persons such as professionals.
Tax 2.02(8)
(8)
Provisions of agreements with Indiana and Kentucky. The reciprocity agreements with Indiana and Kentucky are limited to wages, salaries and commissions.
Tax 2.02(10)(a)
(a) Nonresident persons employed in Wisconsin and residing in a state with which Wisconsin has reciprocity shall file form W-220, “Nonresident Employee's Withholding Reciprocity Declaration,” with their Wisconsin employers to be exempt from withholding of Wisconsin income taxes. Upon receipt of this form, Wisconsin employers may not withhold Wisconsin income tax from Wisconsin personal service income of the employee.
Tax 2.02(10)(c)
(c) The reciprocity exclusion does not apply to Wisconsin lottery winnings of nonresident persons.
Tax 2.02(11)(a)
(a) Wisconsin residents employed in a state with which Wisconsin has reciprocity shall file form 1-ES, “Wisconsin Estimated Tax Voucher," with the Wisconsin department of revenue if their out-of-state employers do not withhold Wisconsin income tax from their personal service income and if they will have a sufficient Wisconsin tax liability to be required to make payments of estimated tax.
Tax 2.02(11)(b)
(b) Wisconsin residents may have their employers cease withholding the other state's income tax from their personal service income and may claim a refund from that state if income taxes are withheld from their personal service income after the effective date of a reciprocity agreement.
Tax 2.02(11)(c)
(c) Wisconsin residents earning personal service income in states where it is taxable by the other state may claim a credit on their Wisconsin income tax returns for net income taxes paid to these states.
Tax 2.02 Note
Note: Refer to s.
Tax 2.955 for information on the credit for tax paid to other states.
Tax 2.02(12)
(12)
Delinquent taxes. Reciprocity agreements do not affect the withholding of delinquent Wisconsin income taxes, interest, penalties and costs under s.
71.91 (7), Stats.
Tax 2.02 Note
Note: Forms may be obtained from the department of revenue's web site at
www.revenue.wi.gov.
Tax 2.02 Note
Note: Out-of-state employers of Wisconsin residents wishing to withhold Wisconsin income tax from those employees' incomes may contact Wisconsin Department of Revenue, Compliance Bureau, P.O. Box 8902, Madison, WI 53708.
Tax 2.02 Note
Note: The State of Maryland enacted an income tax law, Ch.
1, Laws 1992, 1st Spec. Sess., on May 1, 1992, which resulted in the termination of reciprocity between Wisconsin and Maryland, effective for taxable years beginning after December 31, 1991. Prior to enactment of Maryland Ch.
1, Laws 1992, 1st Spec. Sess., Wisconsin practiced reciprocity with Maryland since prior to 1960, based on an informal agreement and acquiescence by Wisconsin and Maryland. Under the provisions of prior Maryland law and s.
71.05 (2), Stats., a Wisconsin resident could exclude from Maryland taxation, the income from salaries, wages, and compensation for personal services to the extent Wisconsin taxed the income of and accorded similar treatment to Maryland residents.
Tax 2.02 Note
Note: Beginning on January 1, 1968 and ending on January 1, 2010, Wisconsin had a formal reciprocity agreement with Minnesota. The reciprocity agreement was limited to income from personal services, including wages, salaries, tips, fees, commissions, bonuses, or similar earnings, provided the taxpayer personally rendered the service. The reciprocity exclusion for personal service income did not apply where the personal or professional service income was earned as a part of a business operated by the taxpayer which had employees that did more than incidental duties for the business, or where there was the sale or delivery of goods which was more than an incidental part of the business. A partner's salary from a partnership where the selling of goods or services of the employees was more than incidental was subject to the reciprocity exclusion, but the partnership profits were not excluded. Distributions from a tax-sheltered annuity were also considered subject to the reciprocity exclusion. To qualify for the exclusion, the Minnesota agreement required the taxpayer to have a place of abode in Wisconsin, and the taxpayer was required to customarily return to it at least once a month.
Tax 2.02 History
History: Cr.
Register, April 1978, No. 268, eff. 5-1-78; r. and recr.,
Register, March, 1991, No. 423, eff. 4-1-91; am. (3) (a) (intro.), 1., (4) (a) 1. to 4., (b) (intro.), (5) (a), (6) (b), (7) and (8), r. (4) (b) 1. and 2. and (9), renum. (10) to (13) to be (9) to (12) and am. (10) (a), (b), (11) (a) and (12),
Register, April, 1993, No. 448, eff. 5-1-93;
CR 17-019: r. (4) (a) 4., (9), am. (10) (a), r. (10) (b),
Register June 2018 No. 750 eff. 7-1-18; correction in (5) (a) made under s.
13.92 (4) (b) 7., Stats.,
Register June 2018 No. 750.
Tax 2.03(1)(1)
Forms. The department shall provide forms for filing franchise or income tax returns and credit claims. Except as provided in s.
Tax 2.09 or as otherwise approved by the department, tax returns and credit claims shall only be filed using the forms prescribed by the department.
Tax 2.03(2)
(2)
Information returns. Information returns required of corporations are specified in s.
Tax 2.04.
Tax 2.03(3)(a)(a) Except as provided in par.
(b) and s.
Tax 2.67 (2) (b), all forms and information required to be filed or furnished by corporations shall be filed or furnished by providing the information requested on the appropriate forms, signing the returns or forms as appropriate and submitting them by one of the following means:
Tax 2.03(3)(a)1.
1. Filing
them by the use of electronic means as prescribed by the department.
Tax 2.03(3)(a)2.
2. Mailing them to the address specified by the department on the form or in the instructions.
Tax 2.03(3)(a)3.
3. Delivering them to the department or to the destination that the department or the department of administration prescribes.
Tax 2.03(3)(b)1.1. The department may require the franchise or income tax return of a corporation be filed electronically. The department shall provide notification at least 90 days prior to the due date of the first franchise or income tax return required to be filed electronically of the requirement to file electronically. This paragraph does not apply to combined returns subject to the electronic filing requirement in s.
Tax 2.67 (2) (b).
Tax 2.03(3)(b)2.
2. The secretary of revenue may waive the requirement to file the franchise or income tax return of a corporation electronically when the secretary determines that the requirement causes an undue hardship, if the person does all of the following:
Tax 2.03(3)(b)2.a.
a. Requests the waiver in writing using Form EFT-102, Electronic Filing or Electronic Payment Waiver Request.
Tax 2.03(3)(b)3.
3. In determining whether the electronic filing requirement causes an undue hardship, the secretary of revenue may consider the following factors:
Tax 2.03(3)(b)3.a.
a. Unusual circumstances that may prevent the person from filing electronically.
Tax 2.03 Note
Example: The person does not have access to a computer that is connected to the Internet.
Tax 2.03(3)(c)
(c) If the return is a combined return, an officer of the designated agent corporation shall sign the combined return. Signing a return includes the process of electronically signing the return. See ss.
Tax 2.03,
2.60, and
2.67 for additional rules relating to combined returns.
Tax 2.03 History
History: 1-2-56; am.
Register, September, 1964, No. 105, eff. 10-1-64; am.
Register, March, 1966, No. 123, eff. 4-1-66, am.
Register, February, 1975, No. 230, eff. 3-1-75; am.
Register, September, 1977, No. 261, eff. 10-1-77; am.
Register, September, 1983, No. 333, eff. 10-1-82; am. (1) (a), (c) and (d), renum. (1) (f) to (j) and (2) to be (1) (g) to (k) and (3) and am. (1) (h) and (k) and (3), cr. (1) (f), (L) to (p) and (2),
Register, July, 1987, No. 379, eff. 8-1-87; r. and recr. (1), am. (3),
Register, June, 1990, No. 414, eff. 7-1-90; r. and recr.,
Register, May, 1995, No. 473, eff. 6-1-95;
CR 02-033: r. (1) (j), renum. (1) (k) to (x) to be (1) (j) to (w), am. (1) (n), (o) and (s) and (4), cr. (1) (x)
Register October 2002 No. 562, eff. 11-1-02; correction in (1) (intro.) made under s. 13.93 (2m) (b) 7., Stats.,
Register June 2006 No. 606;
CR 10-095: r. and recr. (1), (3), r. (4)
Register November 2010 No. 659, eff. 12-1-10.
Tax 2.04
Tax 2.04
Information returns and wage statements. Tax 2.04(1)(b)
(b) “Person" means an individual, trust, estate, partnership, limited liability company, association or corporation.
Tax 2.04(2)
(2)
Compensation for services. Under ss.
71.65 (2),
71.71 (2),
71.715 (2),
71.72 and
71.80 (20), Stats., all persons carrying on activities within this state, whether taxable or not under ch.
71, Stats., are required to file with the department, on federal form W-2 or 1099-R, or on Wisconsin form 9b or other forms approved by the department, a statement of certain payments made within the preceding calendar year. As provided in sub.
(6), the department may require such statement be filed electronically. For individuals who are residents of Wisconsin, the statement shall set forth the salaries, wages, bonuses, commissions, annuities, pensions, retirement pay, fees, or other remuneration paid for services whether subject to withholding or not. For individuals who are nonresidents, the statement shall include all payments for the performance of personal services in Wisconsin, whether subject to withholding or not, except retirement plan distributions identified in s.
Tax 3.085 as being exempt from Wisconsin income tax. A copy of federal form 1099 may be filed in lieu of Wisconsin form 9b. The following shall also apply with respect to compensation for services:
Tax 2.04(2)(a)
(a) All payments which are wages within the definition under s.
71.63 (6), Stats., regardless of amount, shall be reported on federal form W-2. As provided in sub.
(6), the department may require such form be filed electronically.
Tax 2.04(2)(b)
(b) All payments which are not wages within the definition under s.
71.63 (6), Stats., but from which Wisconsin income tax has been withheld, shall be reported on federal form W-2 or 1099-R, as appropriate. As provided in sub.
(6), the department may require such form be filed electronically.
Tax 2.04(2)(c)
(c) Payments of $600 or more which are not wages within the definition under s.
71.63 (6), Stats., and from which no Wisconsin income tax has been withheld, shall be reported on Wisconsin form 9b or federal form 1099. As provided in sub.
(6), the department may require such form be filed electronically. However, if the payment was to an employee for whom a form W-2 is required under par.
(a) or
(b), the payment, regardless of amount, shall be included on form W-2.
Tax 2.04(2)(d)
(d) All statements required shall be filed with the department by January 31. Form WT-7, “Employer's Annual Reconciliation of Wisconsin Income Tax Withheld From Wages," shall accompany the statements submitted, if the employer is required to be registered to withhold Wisconsin income taxes from employees' wages.
Tax 2.04 Note
Note: Forms W-2, 1099-R, 9b, and 1099 that are not required to be filed electronically may be delivered in person to the Department of Revenue at 2135 Rimrock Road, Madison, Wisconsin or mailed to the department. Forms filed on paper may be mailed to Wisconsin Department of Revenue, PO Box 8920, Madison, WI 53708-8920.
Tax 2.04(2)(de)
(de) The department may require Form WT-7 be filed electronically. The department shall provide notification at least 90 days prior to the due date of the first Form WT-7 required to be filed electronically of the requirement to file electronically.
Tax 2.04(2)(dm)
(dm) The secretary of revenue may waive the requirement for a person to file Form WT-7 electronically when the secretary determines that the requirement causes an undue hardship, if the person does all of the following:
Tax 2.04(2)(dm)1.
1. Requests the waiver in writing using Form EFT-102, Electronic Filing or Electronic Payment Waiver Request.
Tax 2.04(2)(ds)
(ds) In determining whether the electronic filing requirement causes an undue hardship, the secretary of revenue may consider the following factors:
Tax 2.04(2)(ds)1.
1. Unusual circumstances that may prevent the person from filing electronically.
Tax 2.04 Note
Example: The person does not have access to a computer that is connected to the Internet.
Tax 2.04(2)(e)
(e) Sections
71.65 (5) and
71.73 (2), Stats., permit a thirty-day extension of time to file the statements described in this subsection. A written request may be mailed or faxed to the department and to be effective shall be postmarked or faxed on or before the due date of the statements.
Tax 2.04 Note
Note: Written requests for extensions may be mailed to Wisconsin Department of Revenue, Mail Stop 5-77, PO Box 8902, Madison, WI 53708-8902 or faxed to (608) 264-6884.
Tax 2.04(3)
(3)
Rents and royalties. Under ss.
71.70 and
71.80 (20), Stats., except as provided in par.
(d), all persons making payments of rents and royalties of $600 or more to individuals who are residents of Wisconsin, regardless of where the property is located, and to nonresident individuals if the property is located in Wisconsin, shall file with the department, on Form 9b or an approved substitute form, a statement of payments made in the preceding calendar year. As provided in sub.
(6), the department may require such statement be filed electronically. The following shall also apply with respect to rents and royalties:
Tax 2.04(3)(a)
(a) A copy of federal Form 1099-MISC may be filed in lieu of Wisconsin Form 9b.
Tax 2.04(3)(b)
(b) Corporations shall file the statement with the department by January 31 and payers other than corporations shall file by January 31.
Tax 2.04 Note
Note: Forms not required to be filed electronically may be delivered in person to the Department of Revenue at 2135 Rimrock Road, Madison, Wisconsin or mailed to Wisconsin Department of Revenue, PO Box 8920, Madison, WI 53708-8920.
Tax 2.04(3)(c)
(c) A 30-day extension of time for filing Forms 9b or substitute forms to report payments of rents or royalties may be allowed.
Tax 2.04(3)(d)
(d) The requirement to file Form 9b or a substitute form does not apply to persons other than corporations who do not deduct the payments in determining Wisconsin taxable income.
Tax 2.04(4)(a)(a) Under s.
71.67 (4) (c), Stats., the administrator of the gaming commission's lottery division shall file with the department a statement of winnings for each lottery prize of $2,000 or more paid in the preceding calendar year.
Tax 2.04(4)(b)
(b) Under s.
71.67 (5) (d), Stats., all persons licensed to sponsor and manage races under s.
562.05 (1) (b) or
(c), Stats., shall file with the department a statement of winnings for each pari-mutuel wager payment of more than $1,000 paid in the preceding calendar year.
Tax 2.04(4)(c)
(c) The winnings required to be reported in pars.
(a) and
(b) shall be reported on federal Form W-2G or on an approved substitute form. As provided in sub.
(6), the department may require such form be filed electronically.
Tax 2.04 Note
Note: Forms W-2G or substitute forms not required to be filed electronically may be delivered in person to the Department of Revenue at 2135 Rimrock Road, Madison, Wisconsin or mailed to Wisconsin Department of Revenue, PO Box 8920, Madison, WI 53708-8920.
Tax 2.04(4)(e)
(e) No extension of time for filing Forms W-2G or substitute forms to report payments of lottery prize winnings or pari-mutuel wager winnings may be allowed.
Tax 2.04(5)
(5)
Disallowance of deductions. Items to be reported on Forms W-2, 1099-R, 9b or substitute forms may be disallowed as deductions from gross income if not properly reported.
Tax 2.04(6)(a)
(a) Under s.
71.80 (20), Stats., if a person is required to file 10 or more wage statements or 10 or more of any one type of information return with the department, the person shall file the statements or the returns electronically, by means prescribed by the department.
Tax 2.04(6)(b)
(b) If a payer participates in the combined federal/state filing program for Forms 1099, the department shall waive the requirement to file those Forms 1099 or comparable information returns electronically, unless the form reports Wisconsin withholding.
Tax 2.04(6)(c)
(c) The secretary of revenue may waive the requirement to file wage statements or information returns electronically when the secretary determines that the requirement causes an undue hardship, if the payer does all of the following:
