Wisconsin state tax: Overview
Wisconsin’s income tax system has three brackets, but most people land in the middle one. Property taxes can be on the higher side, which might come as a surprise to homeowners.
The good news is that Wisconsin has one of the lowest sales tax rates in the country. However, some essential items, like baby diapers, are still taxed. On a brighter note, if you're thinking about long-term planning, your heirs will not face any state taxes on their inheritance, since Wisconsin does not have an estate or inheritance tax.
[Data for this state tax guide was gathered from several sources including the U.S. Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.]
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Wisconsin income tax
Wisconsin has a graduated state individual income tax rate ranging from 3.50% to 7.65%, according to the Tax Foundation.
Wisconsin retirement taxes
Wisconsin tax on retirement benefits: Wisconsin doesn't tax Social Security or Railroad Retirement benefits. Military pay that is exempt from federal taxation is also exempt in Wisconsin.
Taxpayers age 65 and older in the state may deduct up to $5,000 of certain retirement income if they meet the following criteria.
- Have a federal adjusted gross income (AGI) of less than $15,000
- Have a federal AGI of less than $30,000 if married (regardless of whether filing jointly or separately)
- Social Security: Not taxable
- Pensions: Taxable
- 401(k) and IRA Distributions: Taxable
Wisconsin sales tax
Wisconsin's statewide sales tax is 5%. However, the average combined local and state tax rate is 5.70%, according to the Tax Foundation.
- Groceries: Exempt
- Prescription drugs: Exempt
- Clothing: Taxable
How much are property taxes in Wisconsin?
In Wisconsin, the average effective property tax rate is 1.25%, which is higher than in most other states.
Wisconsin property tax breaks for retirees
Wisconsin homeowners who are age 62 or older or have disabilities may qualify for a homestead credit without earned income. Homeowners under age 62 must have earned income to qualify. Income limitations apply.
Additionally, state residents 62 and older may apply for a property-tax-deferral loan of up to $3,525 through the Wisconsin Housing and Economic Development Authority. However, household income must not exceed $20,000.
Applications are also available to veterans, regardless of age.
Wisconsin gas tax
Gasoline | $0.31 per gallon |
Diesel | $0.31 per gallon |
Source: Sales Tax Handbook
Wisconsin taxes on alcohol and tobacco
Product | Tax Amount |
|---|---|
Cigarettes | $2.52 per pack |
Other Tobacco Products | 71% of Manufacturer's Price |
Source: Sales Tax Handbook
Product | Tax Amount |
|---|---|
Wine | $0.25 per gallon |
Beer | $0.06 per gallon |
Liquor | $3.25 per gallon |
Source: Sales Tax Handbook
Wisconsin estate and inheritance taxes
Wisconsin doesn't have an estate or an inheritance tax.
Related Content
-
ESPN to Acquire NFL Network and RedZone in Exchange for 10% Equity StakeESPN will take control of NFL Network and RedZone, while the NFL secures a 10% stake in ESPN — a move that could change how fans watch football.
-
Stocks Rally on Apple Strength: Stock Market TodayThe iPhone maker will boost its U.S. investment by $100 billion, which sent the Dow Jones stock soaring.
-
The Most Tax-Friendly State for Retirement in 2025: Here It IsRetirement Tax How do you retire ‘tax-free’? This state doesn’t tax retirement income, has a low median property tax bill, and even offers savings on gas. Are you ready for a move?
-
Five Ways Trump’s 2025 Tax Bill Could Boost Your Tax Refund (or Shrink It)Tax Refunds The tax code is changing again, and if you’re filing for 2025, Trump’s ‘big beautiful’ bill could mean a bigger refund, a smaller one or something in between next year. Here are five ways the new law could impact your bottom line.
-
New SALT Deduction Could Put Thousands Back in California Homeowners’ PocketsTax Breaks The federal state and local sales tax (SALT) deduction cap is higher this year, and could translate into bigger savings for Golden State homeowners.
-
Money for Your Kids? Three Ways Trump's ‘Big Beautiful Bill’ Impacts Your Child's FinancesTax Tips The Trump tax bill could help your child with future education and homebuying costs. Here’s how.
-
Why Your Summer Budget Feels Tighter: Tariffs Push Up InflationTariffs Your summer holiday just got more expensive, and tariffs are partially to blame, economists say.
-
Alabama Tax-Free Weekend 2025Tax Holiday Here’s everything you need to know about the 2025 back-to-school Alabama sales tax holiday.
-
Key 2025 Tax Changes for Parents in Trump's MegabillTax Changes Are you a parent? The so-called ‘One Big Beautiful Bill’ (OBBB) impacts several key tax incentives that can affect your family this year and beyond.
-
‘I Play Pickleball in Retirement.’ Is It HSA-Eligible?Retirement Tax Staying active after you retire may be easier with these HSA expenses. But there’s a big catch.
