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In Wisconsin, should I be paying state tax on foreign earned rental income?

Hello,

From Tax purposes, I am Wisconsin resident. For the 2015 and 2016 tax years, I have been reporting income from a rental property I own in India.

1. I didn't know this but I heard that even though the income is from a different country, I will have to pay state tax on it in Wisconsin. Is it true? (Because the income was not coming from Wisconsin, I was only including the rental income in the federal return but was reducing it from the taxable income in state return).

2. If the above is true, I am guessing I will have to file amendment to state tax return right - will there be any penalty for doing it so late?

3. Also, will I need to buy a separate product from TurboTax for this - I currently have TurboTax Deluxe 2016 installed on my PC, and will be purchasing 2017 version soon.

Thanks.

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5 Replies
TomD8
Level 15

In Wisconsin, should I be paying state tax on foreign earned rental income?

As a Wisconsin resident, ALL your income is taxable by Wisconsin, regardless of where you earn it, unless it is specifically exempted (such as Social Security benefits).  Therefore your rental income is taxable by Wisconsin.

You should file an amended Wisconsin return for both 2015 and 2016.  You'll need the 2015 and 2016 CD/Download versions of TurboTax, respectively, to do this.

Wisconsin charges 12% interest per year from the due date of the original return on any additional taxes due on an amended return.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.

In Wisconsin, should I be paying state tax on foreign earned rental income?

Thanks for the response. Because the fix needs to be only in Wisconsin tax form and Federal form was fine, can I hand-fill the Form 1NPR (2015) amendment form and submit it? I purchased the 2015 Deluxe software previously from Amazon but lost it during a PC switch.

For 2016, I can use the tax software that is already installed on my machine.
TomD8
Level 15

In Wisconsin, should I be paying state tax on foreign earned rental income?

Form 1NPR is for non-residents and part-year residents only.  If you were a full-year resident of Wisconsin in 2015, you'd use Form 1.  But yes, you can hand-fill whichever form is appropriate for your situation.
**Answers are correct to the best of my ability but do not constitute tax or legal advice.

In Wisconsin, should I be paying state tax on foreign earned rental income?

I am very sorry - I should have double checked this before. I am on H1B visa, and I can file as Resident in Wisconsin only if I am permanent resident. So I have to file myself as a Non-Resident, or Partial Resident.

In this situation also, will Wisconsin tax my rental income from India?
TomD8
Level 15

In Wisconsin, should I be paying state tax on foreign earned rental income?

I can only refer you to Wisconsin's tax laws for aliens, which are on pages 24-27 of this reference:  <a rel="nofollow" target="_blank" href="https://www.revenue.wi.gov/DOR%20Publications/pb122.pdf">https://www.revenue.wi.gov/DOR%20Publicatio...>
**Answers are correct to the best of my ability but do not constitute tax or legal advice.
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