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
- Net Income Tax
- States Where You Filed a Tax Return
- Select Wisconsin from the list
- Return to Nonresident Illinois Main Menu
- Net Income Tax
- Illinois Income
- Wages, salaries, tips, etc..
-
Adjustments to State Wages
- Enter the amount of wages earned in and taxed by Illinois while a Wisconsin resident as a negative number.
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
- Select Wisconsin from the list of states
- Personal Information
- Other Categories
- Taxpayer - Wages Received in IL, KY, MI, OH, PA and/or WI
- Return to Nonresident Main Menu
- Miscellaneous Forms
- 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 Nonresident Kentucky Return
- Select YES - "Were you a Full-Year Resident of a Reciprocal State?"
- Select the Wisconsin from the list
- Select Yes - "Was your ONLY KY Income for 2024 from Salaries or Wages Earned While a Resident of a Reciprocal State? "
- Complete form 740-NP-R
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
- Nonresident and Part Year Income Allocation
- Income Allocation
- Wages, salaries, tips, etc..
- Adjustments to State Wages - Enter the wages for Michigan as a negative.
To claim exempt from future withholdings, file form MI-W4 with the taxpayers employer.
Additional Information: