Living in Indiana, working in Wisconsin
Reciprocal agreement · tax year 2026
You pay Indiana
$2,036
on a seventy-thousand wage
Wisconsin would want
$2,701
The agreement is worth
$665
a year
File this
W-220
with your employer
What the agreement does for you
- Commuting from Indiana into Wisconsin is one of the cases where this genuinely saves you something. At seventy thousand dollars, home wants $2,036 and Wisconsin wanted $2,701. You pay home. The difference, $665, stays in your pocket.
- It does not stay the same as you earn more. On forty-five thousand dollars the Indiana bill is $1,298; on a hundred thousand it is $2,921. Wisconsin would have charged $4,482 at that higher wage. The two states pull apart as the salary rises, which is why this matters more to a senior job than a starter one.
- The agreement only works if you claim it. As a Indiana resident, give your employer the exemption certificate for Wisconsin, and expect to sign a fresh one most years. Without it on file, Wisconsin takes tax from every paycheck. Then you must file there to get it back.
- Wisconsin taxes wages more heavily than Indiana at this income, so the agreement is worth money rather than merely administration: $2,036 against $2,701 on seventy thousand dollars, a difference of $665. ⚠️ Note the direction-dependence — the reverse commute between the same two states carries no dollar benefit at all, because the credit mechanism already equalizes it.
- The differential is income-dependent rather than fixed. Indiana's liability runs $1,298 at forty-five thousand dollars and $2,921 at one hundred thousand, against $4,482 in Wisconsin at the upper figure. Where one state applies a flat rate and the other a graduated schedule the gap widens or narrows monotonically with income, so a single-salary comparison understates how much the pairing matters across a career.
- Reciprocity operates by employee election rather than automatically. The exemption certificate must be lodged with the employer and is generally renewable each year; absent it, Wisconsin withholding continues and a nonresident return becomes necessary to recover it. ⚠️ Employers do not apply the agreement on the basis of a home address alone, so a commuter who never files the certificate obtains none of the benefit while remaining fully eligible for it.
What lands in your account
A $75,000 salary
Filing as
Paid
$2,285per paycheck
| Take-home, year | $59,410 |
|---|---|
| Tax, year | $15,591 |
| Share of pay taxed | 20.79% |
This is an average rate across all your pay — not the rate on your next dollar.
Indiana against Wisconsin
A $75,000 salary
Compare with
−$1,507a year in Wisconsin, once local prices are leveled
| Measure | Indiana | Wisconsin |
|---|---|---|
| Take-home pay | $59,410 | $58,595 |
| Worth after local prices | $64,447 | $62,939 |
| Share of pay taxed | 20.79% | 21.87% |
| State sales tax | 7% | 5% |
| Groceries exempt here | Yes | Yes |
| Clothing exempt at $100 | No | No |
| Property tax rate | 0.74% | 1.42% |
| Price level | 92.2 | 93.1 |
| Housing prices | 71.4 | 78.3 |
| Fuel tax | 37¢ | 30.9¢ |
| Tobacco tax | $3.00 | $2.52 |
City income tax excluded. Sales-tax row: state-only. Exemptions: Indiana, Statewide average; Wisconsin, Statewide average. Clothing: one $100 item; higher prices can change tax.
What you would need there
A $75,000 salary
Moving to
$77,178in Wisconsin, for the same life
| To match take-home only | $76,265 |
|---|---|
| Raise you would need | +$2,178 |
| Prices in Wisconsin | 93 vs 92 |
State taxes and state price levels only. No city tax, and no housing market.
What each state would charge, across the ladder
Reference wages for a single filer, not a claim about anyone's salary. The last column is the difference the agreement actually removes — which is the gap between the two states, not Wisconsin's whole charge.
| Wage | Indiana charges | Wisconsin would charge | Agreement is worth |
|---|---|---|---|
| $45,000 | $1,298 | $1,365 | $67 |
| $70,000 | $2,036 | $2,701 | $665 |
| $100,000 | $2,921 | $4,482 | $1,561 |
What this page cannot tell you
- This covers wages from a job. It does not cover self-employment, rent or investment income — those follow the ordinary rules for Wisconsin.
- ⚠️ And it is a deal between two states. City and county taxes are not part of it, and several of these states have them.
- The comparison here assumes a single filer and treats both states as taxing the same income. Your own numbers will differ.
- Every agreement in this dataset applies to wages and salaries only. Business, rental, gain and investment income sourced to Wisconsin remains taxable there under ordinary nonresident rules, and a commuter with such income may still owe a Wisconsin return notwithstanding the agreement.
- ⚠️ Reciprocity binds the state layer only and commonly does NOT extend to municipal or county income taxes — Pennsylvania's local earned income tax is the standard example, remaining payable at the place of employment despite the state-level agreement. Local liabilities are excluded from every figure on this page.
- Figures are computed for a single filer at the stated wage, treating Indiana's and Wisconsin's definitions of taxable income as equivalent and modeling the resident credit as limited to the home state's own liability. Real returns diverge on filing status, deductions each state allows separately, and credit limitation rules — so these are comparative magnitudes, not a computation of anyone's liability.