Section 71.64. Employers required to withhold.

 

(1)   Withholding from wages.

(a) Every employer at the time of payment of wages to an employee shall deduct and withhold from such wages, without regard for federal insurance contributions act deductions therefrom, an amount determined in accordance with tables to be prepared by the department under sub. (9) . The secretary may grant permission to employers who do not desire to use the withholding tax tables provided by the department to determine the amount of tax to be withheld by use of a method of withholding other than the withholding tax tables, provided such method will withhold from each employee substantially the same amount as would be withheld by use of the withholding tax tables. Employers who desire to determine the amount of tax to be withheld by a method other than by use of the withholding tax tables shall obtain permission from the secretary before the beginning of a payroll period for which the employer desires to withhold the tax by such other method. Applications for use of such other method must be accompanied by evidence establishing the need for the use of such method.

(b) An employer may, at his or her discretion, deduct and withhold from any one payment of wages in a month, in the case of an employee paid more often than once during any month, the total amount which the employer reasonably estimates he or she will be required to withhold under this section from such employee during that month. Permission from the secretary under par. (a) is not needed by any employer acting under this paragraph.

(c) Withholding from marital income shall be allocated between taxpayers in the same manner that income is allocated or would be allocated.

(2)   Changing amount of withholding by written agreement between employer and employee.

(a) Additional amount. In addition to the amount required to be deducted and withheld, an employer and employee may agree in writing that an additional amount shall be withheld from the employee's wages. The amount deducted and withheld pursuant to such an agreement shall be considered as an amount required to be deducted and withheld for all purposes of this subchapter.

(b) Lesser amount. In lieu of the amount required to be deducted and withheld under this section, an employer and employee may agree in writing on a form prescribed and provided by the department that a lesser amount be withheld from the employee's wages if:

1. The employee determines that the lesser amount approximates the employee's anticipated income tax liability for the year.

2. The employee sends a copy of the completed agreement form to the department within 10 days after it is filed with the employer.

3. The agreement expires on April 30 of the following year, for calendar year taxpayers, or 4 months following the close of their fiscal year, for fiscal year taxpayers.

(c) Department may void agreement. If the department determines that an agreement under par. (b) would result in an insufficient amount of tax being withheld, the department may void the agreement by notification to the employer and employee.

(3)   Withholding from pension or sick pay plan. If a payee furnishes written notification to a payor of any pension or to a 3rd-party payor of any sick pay plan that the payee desires to have Wisconsin income tax withheld from the pension or sick pay plan, the payor shall withhold from each pension payment or sick pay payment an amount in accordance with the withholding tables or the amount that the payee designates to the payor. The amount withheld from each payment may not be less than $5. For purposes of this subsection, “pension" includes any retirement payment plan, and “sick pay" includes any amount paid to an employee as remuneration or paid instead of remuneration for any period when the employee is temporarily absent from work because of sickness or personal injuries. Payors withholding under this subsection are employers for all purposes of this section and shall withhold, remit and be subject to the other requirements of an employer in withholding Wisconsin income tax from employees.

(4)   Withholding from payments made to entertainers. For purposes of this section, all payments made to entertainers and entertainment corporations, except payments made as provided under s. 71.80 (15) (b) 2. , are presumed subject to withholding unless the recipient provides to the person making the payment a written statement, on a form prescribed by the department, certifying that the payment is exempt under sub. (6) (b) or s. 71.05 (2) .

(5)   Withholding from entertainer in absence of bond or cash deposit. If no bond or cash deposit is made under s. 71.80 (15) (b) by an entertainer or entertainment corporation at the time of payment of wages to an entertainer, the employer shall either withhold the amount for which a bond should have been provided under s. 71.80 (15) (b) or deduct and withhold the tax reflected by the proper withholding table. If the entertainer establishes to the department's satisfaction that a lower rate is more appropriate, the department shall notify the employer to withhold at the lower rate. The department may notify the employer that it waives the withholding requirement on the amount specified. Payments to an entertainment corporation shall be withheld at the rate of 6 percent unless the payee establishes to the satisfaction of the department that a lower rate is appropriate, in which case the department may notify the employer to withhold at a lower rate.

(6)   Withholding from payments made to nonresidents.

(a) At the time of payment of wages to a nonresident employee which wages were derived from the performance of services both within and without the state, the employer shall deduct and withhold from the wages derived from the performance of services within the state the amount as reflected by the proper withholding table.

(b) No amount shall be withheld from the wages paid to a nonresident employee for services performed in this state if the employer reasonably estimates that during that calendar year the employee will earn less than $1,500; but whenever it appears that the employee will earn more than $1,500 in this state during the calendar year, the employer shall withhold, from wages paid thereafter, such additional amounts as the employer reasonably estimates will be required to offset the amounts not withheld from previous payments.

(c) No amount shall be withheld from wages paid to an out-of-state employee, as defined in s. 323.12 (5) (a) 7. , for disaster relief work, as defined in s. 323.12 (5) (a) 3.

(7)   Special withholding arrangements. The secretary of revenue, acting within his or her discretion, may authorize special withholding arrangements in hardship cases resulting from situations in which persons, domiciled in Wisconsin, are subjected to withholding in some other state by reason of the performance of substantial personal services in such other state, pursuant to s. 71.07 (7) .

(8)   Exceptions.

(a) The employer of any employee domiciled in a state with which Wisconsin has reciprocity under s. 71.05 (2) is not required to withhold under this subchapter from the wages earned by such employee in this state.

Cross-reference: See also s. Tax 2.02 , Wis. adm. code.

(b) This subchapter shall not apply to any county fair association in regard to any employee receiving less than $500 annually in wages or salary from the association.

(c) The department of corrections is not required to withhold under sub. (1) from wages paid to an inmate working in a prison listed in s. 302.01 , and if the inmate's wages do not exceed $2,000 per year the department of corrections is not required under s. 71.65 (3) to file reports relating to those wages.

(9)   Withholding tables.

(a) The department shall prepare, promulgate and publish in the official state paper, without regard to the requirements of ch. 227 , rules establishing withholding tables prepared on a weekly, biweekly, semimonthly, monthly, and daily or miscellaneous pay period basis. Those rules shall also provide instructions for withholding with respect to quarterly, semiannual and annual pay periods.

(b) The department shall from time to time adjust the withholding tables to reflect any changes in income tax rates, any applicable surtax or any changes in dollar amounts in s. 71.06 (1) , (1m) , (1n) , (1p) , (1q) , and (2) resulting from statutory changes, except as follows:

1. The department may not adjust the withholding tables to reflect the changes in rates in s. 71.06 (1m) and (2) (c) and (d) and any changes in dollar amounts with respect to bracket indexing under s. 71.06 (2e) , with respect to changes in rates under s. 71.06 (1m) and (2) (c) and (d) , and with respect to standard deduction indexing under s. 71.05 (22) (ds) for any taxable year that begins before January 1, 2000.

2. The department shall adjust the withholding tables to reflect the changes in rates in s. 71.06 (1n) , (1p) and (2) (e) , (f) , (g) and (h) and any changes in dollar amounts with respect to bracket indexing, with respect to changes in rates under s. 71.06 (1p) and (2) (g) and (h) on July 1, 2000.

(c) The tables shall account for the working families tax credit under s. 71.07 (5m) . The tables shall be extended to cover from zero to 10 withholding exemptions, shall assume that the payment of wages in each pay period will, when multiplied by the number of pay periods in a year, reasonably reflect the annual wage of the employee from the employer and shall be based on the further assumption that the annual wage will be reduced for allowable deductions from gross income. The department may determine the length of the tables and a reasonable span for each bracket. In preparing the tables the department shall adjust all withholding amounts not an exact multiple of 10 cents to the next highest figure that is a multiple of 10 cents. The department shall also provide instructions with the tables for withholding with respect to quarterly, semiannual and annual pay periods.

1987 a. 312 ; 1989 a. 31 ; 1997 a. 27 , 41 ; 1999 a. 9 ; 2011 a. 131 ; 2013 a. 20 , 349 ; 2015 a. 84 . Cross-reference: See also ss. Tax 2.90 and 2.91 , Wis. adm. code.