Wisconsin has reciprocal agreements with Illinois, Indiana, Kentucky and Michigan. If the taxpayer is a Wisconsin resident working in one of these states, and the withheld the other state’s income tax, file for a refund from that state. The taxpayer cannot claim a refund for taxes withheld to a reciprocal state on the resident return.
If the other state is Illinois:
- Add or Edit Nonresident Illinois Return
- Part Year and Nonresident Questions - Indicate the taxpayer is a resident of Wisconsin.
- Return to Nonresident Illinois Main Menu
- Additions and Subtractions to Income on Schedule M
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Other Subtractions
- Enter the total Illinois portion of subtractions (bottom of screen)
- Enter the amount of wages earned in and taxed by Illinois while a Wisconsin resident
The state may send a notice asking to prove why the income is not taxable to Illinois. To claim exempt from Illinois withholdings on future returns, complete form IL-W-5-NR and file it with the taxpayers employer.
If the other state is Indiana:
- Add or Edit Nonresident Indiana Return
- County Information - Complete the questions indicting the taxpayer lived in Wisconsin and the county where they worked.
- Return to Nonresident Indiana Return
- Indiana Reciprocal return (it-40RNR) and answer the questions accordingly.
The taxpayer may still be subject to county tax on the income earned while a nonresident. According to Indiana Informational Bulletin #33, 'Indiana reciprocity agreements do not affect withholding requirements concerning the Indiana County Adjusted Gross Income Tax (CAGIT), County Economic Development Income Tax (CEDIT), or County Option Income Tax (COIT).' The program does not automatically calculate this amount.
To claim exempt from Indiana withholdings on future returns, complete form WH-47 and file it with your employer.
If the other state is Kentucky:
- Add or Edit Nonresident Kentucky Return
- Basic Information
- Residency Information - Complete the questions indicting the taxpayer is a resident of a reciprocal state.
- Return to Kentucky Nonresident Main menu
- Complete form 740-NP-R - One for the taxpayer and one for the spouse (if applicable).
To claim exempt from Kentucky withholdings in the future, file form 42A809 with the taxpayers employer.
If the other state is Michigan:
- Add or Edit Nonresident Michigan Return
- Residents of Reciprocal States - Enter the wages for Michigan as a negative.
To claim exempt from future withholdings, file form MI-W4 with the taxpayers employer.
Additional Information: