Money in the Badger State is a bit of a moving target right now. If you're sitting in a coffee shop in Madison or a tavern in Green Bay talking about the wisconsin state tax rate, you'll probably hear a lot of grumbling about property taxes—which, honestly, are some of the highest in the country. But here's the kicker: the state’s income tax situation has been quietly shifting under our feet.
It isn't just one number. People often ask, "What is the Wisconsin tax rate?" as if there’s a simple answer like a sales tax. But for your paycheck, it’s a progressive ladder.
If you’re filing your 2025 or 2026 returns, you’re looking at a system that was recently overhauled to push more people into lower brackets. Basically, the state had a massive budget surplus, and the politicians actually decided to give some of it back by stretching the brackets out.
The New Income Tax Brackets (2025-2026)
Wisconsin uses four distinct tax brackets. For a long time, you hit the higher rates pretty quickly. But for the 2025 tax year (the ones you're likely dealing with right now in early 2026), the second bracket—the 4.4% one—was expanded significantly.
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If you're filing as Single or Head of Household, here is how the math breaks down:
- 3.5% on your first $14,680 of taxable income.
- 4.4% on everything from $14,680 up to $50,480.
- 5.3% on income between $50,480 and $323,290.
- 7.65% on every dollar you earn over $323,290.
Married couples filing jointly get more breathing room. Their 4.4% bracket now goes all the way up to $67,300, and they don't hit that scary 7.65% top rate until they clear $431,060 in taxable income.
Wait. Taxable income isn't your gross pay. It's what's left after your deductions. Wisconsin’s standard deduction is actually pretty generous and it "slides." As you earn more, your deduction gets smaller until it eventually hits zero for high earners. For 2025, a single person starts with a $14,260 deduction.
The Retirement Surprise
If you're over 67, the wisconsin state tax rate effectively just dropped to zero for a big chunk of your money. A new law that kicked in for the 2025 tax year allows seniors to exclude up to $24,000 of retirement income ($48,000 for married couples) from state taxes.
This covers 401(k)s, IRAs, and pensions. Before this, the exclusion was a measly $5,000. It’s a massive win for retirees who were thinking about fleeing to Florida to save a buck.
Sales Tax and the "Milwaukee Extra"
The base state sales tax is 5%. Simple, right? Not really.
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Almost every county in Wisconsin adds a 0.5% "county tax." So, in most places, you’re paying 5.5%. But if you're shopping in the City of Milwaukee, keep your eyes on the receipt. Since 2024, Milwaukee has a 2% city sales tax on top of the 0.5% county tax and the 5% state tax. That brings the total to 7.9%.
One weirdly specific thing to note for 2026: Wisconsin recently eliminated the 5% sales tax on residential electricity and natural gas for the months of May through October. If you’re looking at your summer utility bills, they should look a tiny bit smaller than they used to.
Business and Corporate Taxes
For the entrepreneurs and C-corp owners, the corporate wisconsin state tax rate is a flat 7.9%. It’s been that way for a while.
If you run an LLC or an S-corp, you aren't paying that 7.9%. Instead, the income "passes through" to your personal return, and you pay the individual rates mentioned earlier. This is why the expansion of that 5.3% bracket was such a big deal for small business owners—it kept more of their profit out of the top 7.65% tier.
What Most People Miss: Property Taxes
You can’t talk about Wisconsin taxes without mentioning the house. While the state income tax is middle-of-the-pack, the property tax is the real gut punch. On average, you’re looking at about 1.25% of your home’s value every year.
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In some counties, like Dane or Milwaukee, it can feel much higher because of school referendums. The "Lottery and Gaming Credit" is your only real defense here. If the home you live in is your primary residence, make sure that credit is on your bill. It usually knocks a few hundred bucks off.
Real World Example: The "Average" Wisconsinite
Let’s say you’re single, living in Eau Claire, and you earn $60,000 a year.
- You take the standard deduction (roughly $11,000-$14,000 depending on the slide).
- Your first ~$14,700 is taxed at 3.5%.
- Your income up to ~$50,500 is taxed at 4.4%.
- Only your last few thousand dollars are taxed at 5.3%.
Your effective tax rate—the actual percentage of your total income that goes to Madison—ends up being way lower than the "bracket" you're in. For a $60k earner, the effective state income tax rate often lands around 3.8% to 4%.
Actionable Next Steps for Tax Season
- Check your age: If you turned 67 in 2025, make sure you or your accountant claims the new $24,000 retirement income exclusion. It’s a "use it or lose it" deal.
- Scan your utility bills: Ensure your provider isn't charging sales tax on your power and gas during the May-October window. Mistakes happen during transition years.
- Adoption costs: If you grew your family recently, the deduction for adoption expenses tripled from $5,000 to $15,000. That’s a huge chunk of change back in your pocket.
- 529 Plans: You can deduct up to $5,130 per beneficiary for contributions to Edvest (Wisconsin's college savings plan). Even if you put the money in on December 31st and take it out for tuition in January, the tax break usually still counts.
The 2026 outlook for the wisconsin state tax rate remains stable, but with a state legislature that loves to argue over the remaining surplus, keep an eye on the news. There are already whispers about trying to move toward a "flat tax" in future sessions, which would fundamentally change everything we just talked about. For now, focus on those expanded middle brackets and the new senior exclusions to keep your bill as low as possible.