Taxes in Wisconsin: State Tax Guide 2026
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Taxes in Wisconsin: State Tax Guide 2026
Tax information is for educational purposes only and does not constitute tax advice. Consult a licensed tax professional for your specific situation.
Wisconsin’s tax system leans heavier than most Midwestern states, with a top income tax rate of 7.65% and above-average property taxes. The state reduced its bracket count from four to three in recent reforms and has been gradually lowering rates. Wisconsin compensates with lower-than-average sales taxes and generous credits for property tax relief. Milwaukee, Madison, and the surrounding suburbs make up the state’s economic engine, and residents there face some of the highest local property tax bills.
Wisconsin Income Tax Rates (2026)
Wisconsin uses a progressive income tax. Following recent consolidation from four to three brackets:
| Tax Rate | Taxable Income Range (Single) |
|---|---|
| 3.50% | $0 – ~$14,320 |
| 4.40% | ~$14,321 – ~$315,310 |
| 7.65% | Over ~$315,310 |
Married filing jointly brackets are roughly double these thresholds. The previous four-bracket system was consolidated in 2024, eliminating the 5.30% bracket.
Wisconsin’s standard deduction is income-based: the maximum is ~$12,760 for single filers and ~$23,620 for married filing jointly, but it phases out for higher earners and reaches zero at ~$117,477 (single) or ~$162,835 (joint). This effectively raises the marginal tax rate for middle-to-upper-income taxpayers.
Sales Tax
| Component | Rate |
|---|---|
| State base rate | 5.00% |
| County add-on | 0.50% (most counties) |
| Average combined rate | ~5.43% |
| Milwaukee County | 5.60% (approved additional 0.10%) |
Wisconsin’s combined sales tax rate is below the national average.
Exempt from sales tax: Most groceries (food for home consumption), prescription medications, and residential heating fuel. Wisconsin also exempts most clothing items from sales tax (unlike neighboring Illinois).
Property Tax
| Metric | Amount |
|---|---|
| Average effective rate | ~1.51% |
| National average | 0.99% |
| Rank | Among the 5 highest nationally |
Wisconsin has some of the highest property taxes in the country. Tax rates are set by overlapping jurisdictions: county, municipality, school district, and special districts. School district levies typically make up the largest share.
Lottery and gaming credit: Applied directly to the first-dollar value of every homesteaded property. The credit amount varies annually but is typically ~$100–$200 per property.
First Dollar Credit: A property tax credit for homesteaded land, applied at the county level.
Example: A home valued at $275,000 in a typical suburban Milwaukee area might pay approximately ~$4,150 per year in property taxes.
Other Taxes
- Estate and inheritance tax: Wisconsin does not impose a state estate tax or inheritance tax.
- Capital gains: Taxed as ordinary income. Wisconsin allows a 30% exclusion of net long-term capital gains from the sale of farm assets and a 60% exclusion for qualifying Wisconsin-based small business stock held for five or more years.
- Fuel tax: ~$0.309 per gallon.
- Cigarette tax: ~$2.52 per pack.
- Alcohol taxes: Beer: ~$0.06 per gallon (among the lowest nationally, reflecting the state’s brewing tradition). Wine: ~$0.25 per gallon. Spirits: ~$3.25 per gallon.
- Premiums tax: Insurance companies pay a 2.00% tax on premiums.
- No local income taxes: Wisconsin does not permit local income taxes.
Tax Breaks and Credits
- Homestead credit: Qualifying homeowners and renters with household income under ~$24,680 can receive a credit of up to ~$1,168. The credit is based on property taxes (or rent constituting property taxes) as a percentage of income.
- School property tax credit: A flat credit of approximately ~$220–$300 applied to property taxes on primary residences.
- Retirement income: Wisconsin taxes most retirement income, including 401(k), IRA, and pension distributions. However, the state offers a retirement income exclusion of up to ~$5,000 per person for qualifying military retirement benefits. Social Security benefits are fully exempt.
- No Social Security tax: Wisconsin does not tax Social Security benefits.
- Earned Income Tax Credit: ~4% (one child), ~11% (two children), or ~34% (three+ children) of the federal EITC.
- 529 plan deduction: Up to ~$3,860 per beneficiary per year for contributions to any state’s 529 plan.
- Veterans property tax credit: Qualifying disabled veterans can receive a full property tax exemption.
Key Takeaways
- Wisconsin’s top income tax rate of 7.65% is above average, and the phaseout of the standard deduction effectively raises rates for middle earners
- Property taxes averaging ~1.51% are among the highest in the nation, making homeownership costs significant
- Sales tax is below average at ~5.43%, with exemptions for groceries and clothing
- Social Security is fully exempt from state tax, and small business/farm capital gains exclusions provide targeted relief
- No state estate or inheritance tax
Next Steps
- Compare Wisconsin to other states at State Income Tax Comparison: All 50 States Ranked
- Understand your federal obligation with the Federal Income Tax Guide 2026
- Make sure you claim everything you can — Tax Deductions You’re Probably Missing
- Ready to file? See How to File Your Taxes Step by Step
Tax information is for educational purposes only. Consult a licensed tax professional.