Wisconsin Withholding laws & HR compliance analysis

Wisconsin Withholding: What you need to know

Wisconsin law requires employers to withhold state income taxes from wages paid to residents for all services. Withholding is required from wages of nonresidents who are expected to earn at least $1,500 during the year for services performed within the state. Withholding must be calculated using withholding tables provided by the state Department of Revenue (DOR). Supplemental wages may either be aggregated with regular wages for this purpose, or a flat percentage of annual gross salary may be applied.
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Employers must withhold Wisconsin income taxes from a nonresident for services performed in Wisconsin, unless:
• The employer is an interstate rail or motor carrier, subject to the jurisdiction of the federal Interstate Commerce Commission and the employee regularly performs duties in two or more states.
• Payment is for retirement, pension, or profit-sharing benefits received after retirement.
• The employee is a resident of a state with which Wisconsin has a reciprocity agreement. Wisconsin currently has reciprocity agreements with Illinois, Indiana, Kentucky, and Michigan. If an employer employs residents of those states, the employer is not required to withhold Wisconsin income taxes from wages paid to those employees. Written verification is required to relieve the employer from withholding Wisconsin income taxes from such employee's wages (Form W-220).
• The employee is a resident of a state that does not have a reciprocity agreement with Wisconsin, and either the employer is an interstate air carrier and the employee earns 50 percent or less of his or her compensation in Wisconsin, or the employer can reasonably expect the annual Wisconsin earnings to ...

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