Wisconsin law requires that you pay tax on your income as it is earned or received. Your employer will generally withhold income tax from your wages. However, if you have taxable non-wage income or wages not subject to withholding, you may need to make estimated tax payments throughout the year. Estimated tax payments are generally required if you expect your Wisconsin income tax return to show a net tax due of $500 or more.
Examples of nonwage income include:
If you wait to pay the tax on this nonwage income with your Wisconsin income tax return instead of making estimated tax payments throughout the year, you may be charged underpayment interest. Underpayment interest is computed at the rate of 12% per year for the period of the underpayment.
Underpayment interest is computed separately for each installment due date. Therefore, you may owe underpayment interest for an earlier installment due date even if you pay enough tax later to make up the underpayment. The later you make your payment, the larger your underpayment interest will be.
File a Wisconsin Schedule U, Underpayment of Estimated Tax by Individuals and Fiduciaries, with your Wisconsin income tax return to report underpayment interest. For more information about underpayment interest, including exceptions, read the Schedule U instructions.
This document provides statements or interpretations of the following laws and regulations enacted as of October 11, 2023: secs. 71.03, 71.09 and 71.64, Wis. Stats., and sec. Tax 2.04, Wis. Adm. Code.
Laws enacted and in effect after this date, new administrative rules, and court decisions may change the interpretations in this document. Guidance issued prior to this date, that is contrary to the information in this document is superseded by this document, according to sec. 73.16(2)(a), Wis. Stats.
MS 5-77Wisconsin Department of Revenue Customer Service Bureau PO Box 8949 Madison, WI 53708-8949 Phone: (608) 266-2776 Fax: (608) 267-1030 Email: DORBusinessTax@wisconsin.gov
The department welcomes your input on our guidance. Submit comments on this guidance document.
Guidance Document Number: 100086
October 11, 2023