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Most won't see Wisconsin income tax cut until next year

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staff, Gazette
July 26, 2013

— The $650 million state income tax cut signed into law last month won't automatically result in higher paychecks for Wisconsin taxpayers.

That's because the state is not changing the withholding tables that tell employers how much to take out in taxes. Unless taxpayers fill out the necessary paperwork for the lesser amount to be withheld, they won't benefit until they file taxes in 2014.

The state has historically not adjusted withholding tables in order to collect more in taxes to pay its bills during the year, Todd Berry, president of the nonpartisan Wisconsin Taxpayers Alliance, said Thursday.

The average taxpayer has between 15 percent and 25 percent more withheld by the state for income taxes than is necessary, Berry said.

"It's been going on for well over a decade and this really was the golden opportunity to change it," Berry said. "The only reason I can come up with for the fact that they didn't is they want the income tax refund to be bigger next April."

Republican state Rep. Dale Kooyenga, who authored the tax cut proposal, originally called for the withholding tables to be changed. But that was removed as the tax cut worked its way through the Legislature.

Kooyenga said he would love to see the tables changed, but he also understands that doing so would create a cash flow problem.



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