IN and WI share no border, so this agreement mainly serves remote employees hired across state lines and Chicago-metro households where one spouse works in each state.
| Scenario | Form To File | Result |
|---|---|---|
| Live IN, work WI | W-220 (to skip WI) | No WI withholding. Pay IN tax only. |
| Live WI, work IN | WH-47 (to skip IN) | No IN withholding. Pay WI tax only. |
OBBBA 2026 (One Big Beautiful Bill Act) raised the federal SALT cap to $40,000. This matters for reciprocity commuters who itemize: your full home-state income tax is now more likely to be fully deductible on federal Schedule A, making the state-level tax difference between your home and work state a real after-tax driver of commute value. Check each state rate: IN top rate 2.95% flat + county (0.5-3%), WI top rate 7.65% top.
Yes. Reciprocity is based on residency and employer location, not geography. Wisconsin’s agreements cover IL, IN, KY, and MI residents; Indiana’s cover KY, MI, OH, PA, and WI residents. Remote work makes the IN-WI pairing increasingly common.
File WI form W-220 (Nonresident Employee’s Withholding Reciprocity Declaration) with your Wisconsin employer. Wisconsin withholding stops and you withhold Indiana tax instead.
File IN form WH-47 (Certificate of Residence). It stops both Indiana state withholding and Indiana county tax withholding - Indiana extends reciprocity to its county income tax, which is unusual.
Your tax is always your home state’s. An IN resident pays 2.95% + county even on WI wages (a big effective saving vs WI’s graduated rates that reach 7.65%). A WI resident pays full WI rates on IN wages. Reciprocity changes withholding and paperwork, and prevents over-withholding at the wrong state’s rates.
No. Wisconsin has no county or municipal income taxes, so W-220 eliminates all WI wage withholding for IN residents. Indiana residents still owe their own county’s tax at home.
See exact post-reciprocity paycheck with IN or WI withholding.
Paycheck Calculator →Run the numbers for each state: Indiana Income Tax Calculator · Wisconsin Income Tax Calculator
Tax calculations are estimates for educational and informational purposes only. This site does not provide tax, legal, or financial advice. Tax laws change frequently. Always consult a qualified tax professional for advice specific to your situation. Data sourced from IRS publications and official state tax authority websites.
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