Wisconsin imposes both corporate income and franchise taxes, alongside requirements for S corporations, partnerships, LLCs, and LLPs. The system ensures that corporations with Wisconsin-sourced income, whether domestic or foreign, comply with filing obligations. Pass-through entities, including S corporations and partnerships, also face state-level filing rules, extensions, and estimated tax requirements.
The state maintains a corporate income and franchise tax rate of 7.9%, and its compliance regime includes strict interest and penalties for non-filing, late filing, negligence, or fraud. Penalties can reach 100% of unreported tax, and criminal fines of up to USD 10,000 or imprisonment apply in cases of deliberate non-compliance.
This blog explains the tax rules in Wisconsin across three categories: Corporate Income and Franchise Tax, S Corporation Income and Franchise Tax, and Partnership LLC & LLP Income Tax. It covers due dates, forms, extension rules, estimated tax requirements, and the associated penalties.
Corporate Income and Franchise Tax
C corporations that conduct business in Wisconsin or generate income from Wisconsin sources must file a corporate income or franchise tax return.
Franchise tax applies to:
- Domestic corporations (organized under Wisconsin law)
- Foreign corporations (not organized under Wisconsin law) that do business in Wisconsin
- Corporations engaged in buying or selling lottery prizes if tickets were originally bought in Wisconsin
Certain exemptions may apply based on statutes or federal law, but in general, these businesses are subject to the corporate income and franchise tax rate of 7.9%.
Filing Requirements: Corporations must file Form 4, Wisconsin Corporation Franchise or Income Tax Return.
Due Date: The return is generally due on the 15th day of the fourth month following the end of the tax year.
Extensions:
- If a federal extension (Form 7004) is filed, Wisconsin automatically extends the state deadline by 30 days after the federal extended due date, with no separate Wisconsin form needed. A copy of the federal extension must be included with the return.
- If no federal extension is requested, Wisconsin provides an automatic 7-month extension or until the original federal due date, whichever is later.
This ensures corporations have time flexibility while still keeping payments timely.
Corporations with a total franchise or income tax liability and economic development surcharge of USD 500 or more must make quarterly estimated tax payments. These payments are made using Form Corp-ES, Wisconsin Corporation Estimated Tax Voucher.
Interest and Penalties:
- Interest on delinquent taxes is charged at 18% per year.
- Civil penalties may reach 100% of the unreported tax amount.
- Filing a false return can result in criminal penalties, including fines of up to USD 10,000 and imprisonment.
- Failure to disclose reportable transactions may attract additional penalties, including a USD 30,000 fine for nondisclosure of listed transactions.
Wisconsin’s penalty framework emphasizes accuracy and timely filing, reflecting a zero-tolerance stance toward negligence and fraud.
S Corporation Income and Franchise Tax
S corporations in Wisconsin operate as pass-through entities for federal purposes but still have state-level obligations.
Due Date: Returns are due on the 15th day of the third month following the end of the tax year.
Filing Requirements: S corporations must file Form 5S, Wisconsin Franchise or Income Tax Return for Pass-Through Entities.
Extensions:
- A federal extension automatically extends the Wisconsin due date by 30 days beyond the federal extension. No Wisconsin form is needed. A copy of the federal extension must be attached to the state return.
- If no federal extension is requested, Wisconsin grants an automatic 7-month extension or until the federal due date, whichever is later.
Tax Rate: While S corporations pass income through to shareholders, they are still subject to Wisconsin’s corporate income and franchise tax rate of 7.9% for certain state-level obligations.
This ensures consistent compliance across both C and S corporations.
Estimated Tax Payments:
- S corporations with a franchise or income tax liability (including the economic development surcharge) of USD 500 or more must make quarterly estimated tax payments.
- Payments can be made using Form Corp-ES or through electronic funds transfer (EFT).
Interest and Penalties:
- Delinquent taxes accrue 18% annual interest.
- Civil penalties can be 100% of the unreported tax.
- Filing false returns may result in criminal penalties, including fines of up to USD 10,000 and imprisonment.
- Non-disclosure of reportable transactions can lead to a USD 30,000 penalty.
These provisions highlight the importance of accuracy, disclosure, and timeliness.
Partnership LLC & LLP Income Tax
Partnerships, LLCs, and LLPs are treated as pass-through entities in Wisconsin. Income, deductions, and credits flow through to the individual partners, who report them on their personal returns.
Due Date: The partnership return is generally due on the 15th day of the third month following the end of the tax year.
Filing Requirements: Entities must file Form PW-1, Wisconsin Partnership Return, if they have income derived from Wisconsin sources or Wisconsin resident partners.
Extensions: Wisconsin provides an automatic 7-month extension for filing Form PW-1.
Estimated Tax Payments: Pass-through entities must make estimated withholding tax payments if total withholding exceeds USD 500. Installments are based on the smaller of:
- 90% of the current year’s Wisconsin net tax,
- 100% of the previous year’s Wisconsin net tax (if the return covered a full 12 months), or
- 90% of the current year’s net tax calculated by annualizing income.
Penalties: A USD 50 late filing fee applies for returns filed after the extension date.
This structure ensures both accurate partner-level reporting and timely compliance at the entity level.
Conclusion
Wisconsin’s tax framework combines a 7.9% corporate income and franchise tax rate with rigorous compliance obligations for corporations and pass-through entities.
- C corporations must file Form 4, pay the 7.9% tax, and make quarterly estimated payments if liability exceeds USD 500. Extensions are available, but penalties for false or negligent filings are severe.
- S corporations file Form 5S, with similar estimated payment rules, extensions, and penalty structures. Despite being pass-through entities, they still face state-level filing obligations.
- Partnerships, LLCs, and LLPs file Form PW-1, make estimated withholding payments if liability exceeds USD 500, and comply with automatic extension rules.
Wisconsin enforces compliance with some of the strictest penalties in the U.S., including civil penalties of up to 100% of unreported tax, fines of USD 30,000 for nondisclosure, and potential criminal liability. Timely filing, accurate reporting, and proactive tax planning are essential for businesses operating in the state.
