What is reciprocity, and which states have reciprocity with Wisconsin?
Wisconsin currently has reciprocity agreements with five states: Illinois, Indiana, Kentucky, Michigan, and Minnesota. These agreements state, in general, that residents of these states will be taxed on personal service income by their home state, rather than by Wisconsin. Conversely, Wisconsin will tax Wisconsin residents working in one of these states and the other state generally will not tax the personal service income of Wisconsin residents who are employed in that state. Reciprocity applies only to personal service income. Personal service income generally includes salaries, wages, commissions, and fees earned by an employee. Reciprocity does not apply to other types of income, such as gains on the sale of property, rental income, and lottery winnings. There are different reciprocal agreements with each of the five states. Personal service income may mean something different in each state. For more information on reciprocity, refer to Wisconsin Publication 121, Reciprocity.
