Sorry for the confusion. Here are the exact words as mentioned in the Withholding Tax update from WI state below:
"Example 2
Facts:
• Company D is located in Minnesota
• Individual E is a resident of Wisconsin and an employee of Company D
• Prior to the national emergency, Individual E commutes daily to work for Company D in Minnesota
• During the national emergency, Company D allows Individual E to work from his or her home in
Wisconsin. Company D has no other activities in Wisconsin during the national emergency.
Wages paid to Individual E prior to the national emergency are subject to Wisconsin income tax because
he or she is a resident of Wisconsin. However, Company D is not required to withhold Wisconsin income
tax from these wages because of the special withholding arrangement between Wisconsin and Minnesota.
More information about this arrangement is located on the department's web site here:
https://www.revenue.wi.gov/Pages/TaxPro/2010/news-2010-100120.aspx.
Wages paid to Individual E during the national emergency are subject to Wisconsin income tax because
he or she is a resident of Wisconsin. However, because Company D is not considered to have nexus in
Wisconsin during the national emergency (COVID-19), it is not required to withhold Wisconsin income tax
from Individual E's wages. Company D may withhold Wisconsin income taxes from Individual E's wages."
