Living in the Badger State usually means great cheese, better football, and a tax system that feels like it’s constantly shifting under your feet. Honestly, if you haven't looked at the state of wisconsin tax rates lately, you’re probably operating on old info. The 2025-2027 budget cycle, specifically 2025 Wisconsin Act 15, basically tore up the old script for a lot of middle-class families and retirees.
It’s not just one flat number. People often ask, "What is the Wisconsin tax rate?" as if there’s a simple answer. There isn't. You've got four different income brackets, a base sales tax that gets bumped up by counties, and property taxes that make some people want to move to Florida. But here's the kicker: the state actually expanded the lower brackets recently, which means more of your money is staying in your pocket before the higher rates kick in.
The Income Tax Shift: New Brackets for 2025 and 2026
Wisconsin uses a progressive tax system. That's just a fancy way of saying the more you make, the bigger the bite the Department of Revenue (DOR) takes. For the 2025 tax year (the ones you're likely thinking about right now in early 2026), the rates range from 3.5% to 7.65%.
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The real news isn't the top rate—that stayed at 7.65% for the high earners—it’s the "bracket creep" fix. Governor Tony Evers signed off on expanding the second bracket. This is huge because it keeps more of your income at the 4.4% rate instead of letting it jump into the 5.3% tier too early.
For a single person or head of household, the breakdown looks like this for 2025 income:
You pay 3.5% on your first $14,680.
From $14,680 up to $50,480, the rate is 4.4%.
Anything from $50,480 to $323,290 is taxed at 5.3%.
If you’re doing really well and clear over $323,290, you hit that 7.65% ceiling.
Married couples filing jointly get a bit more breathing room. Their 4.4% bracket now goes all the way up to $67,300. If you’re comparing this to 2024, the jump in these thresholds is a legitimate win for the average worker in Milwaukee or Madison.
Why Retirees are Winning Right Now
If you’re 67 or older, the state just gave you a massive high-five. Kinda.
Starting in 2025, there’s a new retirement income subtraction. You can now exclude up to $24,000 of qualifying retirement income from your Wisconsin taxable income. If you’re married and both of you are 67+, that’s $48,000 you don't pay state tax on.
There’s a catch, though. You can’t double dip. If you take this exclusion, you typically can't claim other state tax credits. You’ve gotta do the math—or have a CPA do it—to see if the exclusion is worth more than the credits you’d be giving up. For most, the $24k exclusion is a slam dunk.
Sales Tax: It’s Not Just 5%
You walk into a store, see a price tag, and add 5% in your head. Stop doing that. While the state sales tax is technically 5%, almost nobody actually pays just 5%.
Seventy out of Wisconsin's 72 counties have a 0.5% "county tax." So, in most places, you’re looking at 5.5%. But if you’re in Milwaukee, it’s a different world. Since early 2024, Milwaukee County bumped their rate to 0.9%, and the City of Milwaukee added a 2% city tax on top of that.
Essentially, if you’re buying a TV in the City of Milwaukee, you’re paying 7.9%.
- 5% (State)
- 0.9% (County)
- 2.0% (City)
Even Racine and Manitowoc joined the 0.5% county tax club in 2025. It adds up. If you’re making a huge purchase, like a car or a tractor, driving one county over might actually save you a few hundred bucks depending on where the "delivery" or "registration" occurs.
The Property Tax Reality Check
Property taxes in Wisconsin are... intense. We consistently rank in the top 10 or 15 highest in the country. It’s the price we pay for local control and decent schools, I guess.
In late 2025, property tax bills saw some of the biggest jumps in decades, mostly driven by K-12 school levies. On average, school-related taxes jumped nearly 8%. The state tries to offset this with the Lottery and Gaming Credit and the School Property Tax Credit, but your bill is still going to be a gut punch.
The median-valued home in Wisconsin (around $290,000 to $300,000 lately) is looking at a tax bill somewhere between **$3,500 and $3,800** depending on the specific municipality. If you live in a high-growth area like Waukesha or certain parts of Dane County, don't be surprised if your "effective" rate is closer to 1.5% or 1.7% of your home's value.
Business and Corporate Taxes
For the entrepreneurs out there, the corporate income and franchise tax rate is a flat 7.9%.
It’s been there for a while.
Unlike the individual rates, there’s no "bracket" system for C-corps. You make a dollar, you pay 7.9 cents. Interestingly, this is actually higher than the top individual rate.
If you’re a pass-through entity (like an LLC or S-Corp), your income "passes through" to your personal return, meaning you pay the individual rates mentioned earlier. This is why many small business owners in Wisconsin are actually cheering for the individual rate cuts—it’s a direct pay raise for them.
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Surprising Deductions You Might Miss
Most people just take the standard deduction and call it a day. In Wisconsin, the standard deduction is "sliding scale." It phases out as you make more money. If you’re single and make over $132,549, your standard deduction is zero. Yeah, zero.
But, you can still claw some money back with:
- Adoption Expenses: The deduction just tripled from $5,000 to **$15,000** per child.
- College Savings: You can deduct up to $5,130 per beneficiary for Edvest or Tomorrow’s Scholar accounts.
- Private School Tuition: You can deduct up to $4,000 for K-8 and $10,000 for high school tuition per student.
Actionable Steps for Your 2025/2026 Taxes
Don't just wing it this year. The changes to the state of wisconsin tax rates are specific enough that a little planning goes a long way.
- Check your age: If you turned 67 in 2025, ensure you are using the new retirement subtraction. It’s a massive benefit that wasn't there in this form a few years ago.
- Adjust your withholding: If you're a W-2 employee, the new 4.4% bracket expansion means you might be over-withholding. Check your paystub. You might want to update your WT-4 form to get more cash in your check now rather than waiting for a refund next year.
- Audit your "Big Purchases": If you’re buying a vehicle or expensive equipment, verify the sales tax rate of the location. A 2.4% difference between Milwaukee and a neighboring county is $600 on a $25,000 car.
- Max out 529s: If you have kids or grandkids, the $5,130 deduction is a "bottom-line" win. Even if you put the money in on December 31st and take it out for tuition in January, you still get the tax break.
- Look at Property Tax Credits: Ensure you’re claiming the School Property Tax Credit on your income tax return. It can be worth up to $300, and many people forget it because they think their "property taxes are handled by the mortgage company."
Wisconsin isn't a "low tax" state, but it’s becoming a "smarter tax" state for specific groups. Between the retirement breaks and the expanded middle-class brackets, the 2025-2026 landscape is much friendlier than the 2020 era. Just keep an eye on those local sales tax surcharges—they’re the silent budget killers.